Defense Arm of US Investment Manager Buys Fraser Industries
A group focused on investments in the U.S. defense sector, recently launched by a Florida-based investment manager, has agreed to acquire the Wisconsin-based Fraser Shipyards as part of a planned move into shipbuilding and defense sector investments. Wildcat Defense, part of Wildcat Equity Partners, reports it plans to make investments in the operations after closing the acquisition of Fraser Industries, while it is also exploring other investments, including an offer it made to acquire Austal’s U.S. operations.
The operations of Fraser Industries include Fraser Shipyard, based in Superior, Wisconsin, which has been building and maintaining ships on the Great Lakes and for the military since 1888. The company also consists of Lake Assault Boats, Northern Engineering, and Fraser Terminal. Wildcat reports the company will continue under existing management and that it expects to invest $350 million into the yard to grow the Faster workforce and expand the manufacturing footprint in support of the plans already in the planning stages at the shipyard.
The investment manager points to the emerging opportunities as the United States looks to modernize infrastructure at U.S. shipyards. The group had recently formed Wildcat Defense and earlier in the week formally announced the new segment, saying it was focusing on acquiring, investing in, and operating strategically important companies across the U.S. defense industrial base.
"The United States cannot rebuild its defense industrial base without rebuilding the companies and workforce that underpin it. That requires more than capital. It requires American ownership with the operational expertise and willingness to invest for decades, not just until the next exit,” commented Eric Nicolaides, Group Chairman and CEO of Wildcat Equity Partners.
Announcing the agreement to acquire Fraser, Nicolaides said, “We believe this modernization and expansion should be done by U.S. firms improving and expanding U.S. shipyards.”
Fraser reports that under Wildcat’s ownership it will remain committed to its existing partnerships, including with Fincantieri and Donjon shipyard to compete for the Coast Guard’s seven light icebreakers. At the same time, Wildcat said it will act as an accelerator related to Fraser’s ongoing efforts to seek partnering opportunities with best-in-class technology providers.
“We stand ready to take the turnaround steps successfully employed at Fraser to a wider Wildcat platform that advances U.S. shipbuilding and repair,” commented Patrick Kelly, the current co-owner and CEO of Fraser.
Wildcat in September submitted a non-binding proposal to acquire the U.S. operations of Austal. It proposed an enterprise valuation of $1.25 to $1.35 billion for Austal USA, setting it up for a potential bidding war with Hanwha USA, which is also pursuing Austal USA, while Wildcat also called for a due diligence.
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The defense investment company is being led by Glenn Vogel, a former U.S. Marine Corps officer who has been appointed Chief Executive Officer of Wildcat Defense.
They highlighted an investment strategy that they said will not be constrained by fixed investment periods or predetermined exit timelines. It plans to acquire controlling or significant ownership positions in strategically important businesses. It highlights targets in shipbuilding, ship repair and maritime infrastructure, advanced defense manufacturing, critical materials, and defense technology. It looks to provide capital and operational expertise to expand production, invest in innovation, and support government customers.
