Defence and aerospace giant Babcock International Group Plc has announced plans to buy up its Australian naval joint venture for £32m.
The group, which operates the huge dockyards at Devonport in Plymouth and Rosyth in Scotland, has entered into a sales and purchase agreement to acquire the remaining 50% interest in its Australian Naval Ship Management (NSM) joint venture from its long-term joint venture partner in Australia.
The FTSE250 company is expecting to pay AUD60m (about £32m), in an acquisition subject to customary approvals. The NSM joint venture was established in 2012 to maintain the Royal Australian Navy's ANZAC class frigates.
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Today the business has evolved into a strategic maritime sustainment partner to Australia, supporting not only the Anzac class under the Warship Asset Management Agreement, but two Canberra Class Landing Helicopter Docks (LHD) and 12 LHD Landing Craft. NSM has about 300 employees.
The acquisition will allow Babcock Australasia, one of the group's focus countries, to further strengthen the breadth of its support to the Australian Defence Force's maritime capability and to provide additional capability for Australia's current and future maritime programmes.
Australian Naval Ship Management has expanded in the year to the end of March 2021 reported revenue of AUD254m (about £134m), with Babcock entitled to an equity share of 50%.
David Lockwood, Babcock chief executive, said: "We're very proud of the success of NSM since its formation nearly a decade ago. We look forward to continuing to provide innovative and highly skilled support to the Australian Defence Force as we further develop our presence in this important market."
Babcock has just completed the sale of its stake in aviation services company AirTanker Holdings Ltd netting it £95m. The gourp offloaded its 15.4% stake to global investor and fund manager Equitix Investment Management Ltd.
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The deal brought in a total of £126m but Babcock has had to repay £31.1m of shareholder loans, which were included in the company’s net debt.
The sale was part of Babcock's ongoing targeted disposal programme - a turnaround plan to streamline the group and tackle losses made during the Covid pandemic.
This was the fourth disposal completed, and the £95m raised brings gross proceeds generated to date to £448m, surpassing the minimum £400m the group had been aiming to collect from various sell-offs.
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In December 2021, Babcock sold its power division to infrastructure services provider M Group Services for £50m as part of the streamlining plan. It had already sold marine division business Frazer-Nash Consultancy to KBR, an American engineering giant, for £293m.
Meanwhile, the 海角视频’s competition watchdog has been probing Babcock’s £10m sale of its oil and gas aviation business. The Competition and Markets Authority (CMA) is assessing whether the deal, which would see helicopter services specialist CHC Group LLC acquire a business that ferries crew to offshore oil platforms by helicopter, might cause a substantial lessening of competition in the 海角视频.
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