Patrick Durrant | Sydney
The defence and commercial engineering division of Newcastle shipbuilder Forgacs has been acquired by Perth based Civmec, allowing the Singapore-listed company to establish an east coast headquarters.
The proposed acquisition includes a purpose-built ship building site, Forgacs Shipyard – Tomago which is located 14 kilometres from the Port of Newcastle, NSW on the Hunter River. The 17 hectare site has 535 metres of river frontage with two ship basins.
The acquisition also includes plant and equipment currently located at the Forgacs Hexham Heavy Engineering workshop and at the Forgacs Gladstone Heavy Engineering workshop.
"It will also give us the opportunity to acquire in-house submarine building and technical expertise."
“This proposed transaction represents very good news for the Newcastle and Hunter Region as Civmec will be using the Tomago shipyard facility as its East Coast headquarters and intend to replicate their WA capabilities at Tomago, near Newcastle,” Forgacs chairman Peter Burgess said.
Civmec’s head office and primary manufacturing facility is located at the Australian Maritime Centre (AMC) at Henderson, near Perth, and the engineering and construction services firm has 1500 employees servicing the oil and gas and minerals and metals industries, and public infrastructure projects in Western Australia.
The company said in a statement it believes that the considerable opportunities in the Infrastructure sectors on the East Coast as well as the long term outlook within the Defence, Oil & Gas and Metals & Minerals sectors justifies the investment.
“This is a very exciting opportunity for our company to extend our multi-disciplinary operations to the east coast of Australia and to gain a long established foothold in the defence shipbuilding industry," Civmec CEO Pat Tallon said.
"It will also give us the opportunity to acquire in-house
submarine building and technical expertise."
The company, which specialises as a fabricator, constructor and project manager in the resources and infrastructure sectors, has no experience in building submarines or indeed ships, but Tallon said there was a great deal of similarity in the work they are familair with, and that required to build the submarines.
Civmec recently appointed former Royal Australian Navy submariner Commodore Mike Deeks as head of its new defence unit to establish a presence in the defence sector.
"We anticipate that we could build submarines in Western Australia," Deeks said.
Subject to satisfactory due diligence, necessary stakeholder approval and the finalisation of the sale and purchase agreement, Civmec expects to complete the transaction in December 2015. The parties have agreed to enter into a due diligence process and the final terms of the agreement, which are commercially sensitive, will be disclosed upon finalisation of the sale.
Forgacs and Thales Australia were notified just this week that their joint bid to build up to 21 vessels for the Sea 3036 Pacific Patrol Boats program had been rejected by the Department of Defence due to it being "irrevocably noncompliant".
Forgacs ‘Products’ business, Forgacs-Broens does not form part of the sale and will continue to operate from its Ingleburn, NSW and Elizabeth, SA facilities.
