Hanwha Acquires Austal

Hanwha Ocean's USD 662 million offer to acquire acquire Austal is a positive signal for US shipyard valuations and interest in the sector.

Austal, headquartered and listed in Australia, made 77% of its 2023 revenue through its US subsidiary Austal USA.

Hanwha’s offer price of USD 662 million equals 9% of Austal’s USD 7.54 billion orderbook. With Austal's public rebuff of the offer, the closing price will likely be higher than the original bid if a deal is reached.

A recent comparable M&A deal in the sector was the November 2022 Bollinger Shipyards acquisition of VT Halter Marine at USD 15 million -- less than 1% of its USD 1.9 billion orderbook.

Philly Shipyard, Inc. (which I had speculated would be Hanwha’s acquisition target) is currently trading at a market cap of USD 40 million or 2.3% of its USD 1.7 billion orderbook.