Navy dockyard changes hands for £350m
Thursday, 10 May 2007 09:52
Babcock says it will become the UK's leading naval maintenance firm
Engineering and support firm Babcock has announced the purchase of Plymouth's Devonport dockyard for £350 million.
The Royal Navy's submarines and surface vessels are serviced at the dockyard, and Babcock says the acquisition will see it become Britain's leading naval maintenance supplier.
And the London-based firm expects to generate "significant" cost-savings through the purchase, which will ultimately be paid for in cash after a £90 million share placing deal is used to secure additional funding.
The takeover of Devonport from its owners is subject to Babcock shareholder approval, as well as the consent of selling Ministry of Defence (MoD) shareholders.
Accompanying today's acquisition announcement Babcock has released its full-year results, with the firm revealing a 38 per cent rise in profits before tax to £57 million.
"This transaction strengthens Babcock's position as a leading support services group and a major supplier of services to the UK's armed forces," said the firm's chief executive Peter Rogers.
"We believe the combined strength of Babcock and [Devonport] will yield significant strategic and financial benefits to the MoD in line with the objectives set out in the defence industrial strategy, whilst creating significant value for Babcock's shareholders."