Kongsberg Maritime AS has signed an agreement to sell its underwater technology company Hydroid, Inc. for USD 350 million to Huntington Ingalls Industries (HII), the largest supplier of vessels to the US Navy. The agreement provides that, as of closing, the parties will enter into a strategic alliance agreement concerning underwater technology and maritime solutions.
Kongsberg Maritime acquired Hydroid for USD 80 million in 2007 and is now selling this US subsidiary for USD 350 million on a debt-free and cash-free basis and as adjusted off an agreed upon working capital.
"Kongsberg Maritime has driven technology development and created considerable value during the 12 years it has owned Hydroid, and we are capitalizing on this now. We are proud to have positioned Hydroid as a leading supplier of small and medium-sized autonomous underwater vessels in the market. We now look forward to work together with HII on new, maritime solutions and, at the same time, strengthening our world-leading underwater environment in Horten,” says Geir Håøy, President and CEO of the KONGSBERG Group.
Kongsberg Maritime delivers globally first-class products to customers, including sensor and sonar technology and hydro acoustics from Horten in Norway. According to the agreement, the parties will enter into a strategic alliance at closing. It will combine the two companies’ complementary experience, expertise and technology. The aim of the agreement is to strengthen both parties' abilities to sell their products and solutions to both US and global customers in the underwater segments.
“Kongsberg Maritime will continue to aggressively develop technology, including that related to our underwater expertise. We are the global leader in civilian-sector maritime technology, while HII is the world's largest supplier of navy vessels. This alliance will allow a wider range of our maritime solutions for both naval and civilian usage in the United States and the rest of the world,” says Egil Haugsdal, CEO of Kongsberg Maritime.
Hydroid, Inc. is a wholly-owned indirect subsidiary of Kongsberg Maritime AS and has its head office in Pocasset Massachusetts in the USA. Hydroid builds autonomous underwater vessels and sells them to military and commercial markets, with the US Navy as its biggest customer.
At the end of Q4 2019, Hydroid had an order backlog of MNOK 813. In 2019, Hydroid achieved revenue of MNOK 862 and an EBITDA of MNOK 133. Refer to the table below for key figures for the 2016-2019 period.
|Profit and loss items (MNOK)*||2016||2017||2018||2019|
|Operating profit before depreciation and amortization (EBITDA)||97||76||84||133|
|Earnings before interest and taxes (EBIT)||60||38||60||120|
*Key figures are presented as reported in Kongsberg Gruppens consolidated financial statements.
The transaction is expected to be completed in Q1 2020 and is subject to customary closing conditions, such as approval by the relevant authorities.
Upon repatriation, the net proceeds in Norway are expected to be about USD 248 million after tax. The final accounting gain will be known when the Q1 2020 results are presented on 10 May 2020.
KONGSBERG will announce how the proceeds are to be utilized on February 12, 2020, in connection with the presentation of its Q4 2019 results.