Titan Acquires HII's San Diego Shipyard
One the United States' largest fleet service and ship repair sites is changing hands.
Ship repair and commercial- and defense-related fabrication services provider Titan Acquisition Holdings announced on Wednesday it has reached a deal to acquire San Diego Shipyard from Huntington Ingalls Industries (HII). Financial terms were not disclosed. The transaction, expected to close in the second quarter, is subject to customary closing conditions.
The San Diego Shipyard, formerly Continental Maritime of San Diego, is located in the nation’s largest Navy port and encompasses 14 acres of land and 17 acres of water area on San Diego Bay. San Diego Shipyard is a division of Huntington Ingalls Technical Solutions Fleet Support Group and provides shipfitting, welding, pipefitting, machinery, repair, marine electrical repair and installation, sheet metal repair and fabrication, boiler repair and preservation services to customers.
Titan, created through the combination of Vigor Industrial and MHI Holdings, said the acquisition creates opportunities to better serve key defense customers, economies of scale, expanded scope, and performance optimization. Current key customers for Titan include the U.S. Navy, U.S. Coast Guard, Military Sealift Command, the U.S. Army, Boeing, and non-defense and commercial customers including state and local ferry systems.
The addition of the San Diego Shipyard will expand Titan’s ship repair and complex fabrication business with critical mass, expanded capabilities, and strategically located facilities in Norfolk; San Diego; Seattle; Portland, Oregon; Vancouver, Washington; and Ketchikan, Alaska. Outside the partnership, HII will continue to provide a broad set of naval sustainment services, including maintenance and modernization, advanced naval logistics, and operational training and support for the U.S. Navy fleet through its Newport News Shipbuilding, Ingalls Shipbuilding and Technical Solutions divisions.
“We are excited to add the San Diego Shipyard to our already strongly positioned and growing enterprise. The opportunity to add the San Diego Shipyard to our family of companies is a natural step in our evolution given its strategic location and wealth of talented employees,” said Jim Marcotuli, CEO and President of Titan. “We look forward to sharing best practices and leveraging our collective assets to improve service to our valued customers.”
As a part of this transaction, HII will hold a minority interest in Titan. Titan is controlled by majority owner The Carlyle Group and Stellex Capital Management. Carlyle is a global investment firm whose investment in MHI and Vigor last year was made by the Carlyle U.S. Equity Opportunity Fund II, a $2.4 billion investment vehicle that focuses on middle-market and growth companies in the United States and Canada. Other investors include Frank Foti, former CEO of Vigor, and members of management.
Andy Green, Executive Vice President HII and President, HII Technical Solutions, said, “We believe this transaction will enable us to leverage complementary capabilities, capacity and facilities to improve efficiencies and better serve the needs of our U.S. Navy customer.”
Tom Rabaut, Chairman of Titan, said, “Our goal is aimed at creating a stronger company of scale, capable of providing differentiated, coast-to-coast services to the U.S. Navy, U.S. Army and other defense, infrastructure, and maritime customers. Titan is well positioned with our unique, national assets to grow in the highly attractive ship repair and fabrication markets, supported by compelling sector dynamics.”