InfraStrata Rescues Appledore Shipyard, Building on H&W Acquisition
InfraStrata, a UK company focused on developing and commercializing infrastructure projects, announced the acquisition of the assets of England’s Appledore Shipyard. The acquisition comes less than a year after InfraStrata acquired the famed Harland & Wolff shipyard in Belfast, Northern Ireland.
Located in western England on the Bristol Channel, Appledore Shipyard has a storied history dating back to 1855. It was renamed Appledore in the 1960s and best known as a builder of mid-sized and smaller military vessels, yacht, ferries and components for larger ship constructions. The yard ceased operations in March 2019, and currently had just one employee a caretaker.
InfraStrata agreed to acquire the assets which include a 119-meter covered drydock, 500 meters of quayside and 29 acres of land with fabrication halls, repair shops, and other facilities for a total consideration of approximately $9.2 million. The payment will consist of approximately $7.4 million in cash payable over 30 months with the remainder in ordinary shares.
This is the company’s second acquisition of shipyards as it acquired Harland & Wolff in December 2019, saving the famed facility from bankruptcy. With two drydocks measuring 356 meters and 556 meters, H&W (Belfast) has the largest drydock capability in the UK and the second largest in Europe positioning the yard to focus its work on larger vessels.
According to InfraStrata, the acquisition of Appledore, which will be renamed H&W (Appledore) is a strategic acquisition designed to expand their presence into the specialized, smaller end of the market. With a dock length of 119 meters, InfraStrata comments, “There are very few shipyards in the UK that can offer this type of undercover building dock and repair facility and, given the number of sovereign vessels required in this category over the next ten years, the company believes that this is a market segment that cannot be ignored.” They will serve the large vessel market, over 300 meters in Belfast, and the small vessels at Appledore, avoiding the “busy, crowed and highly competitive,” mid-sector of shipyards where they do not believe they have a competitive advantage.
Based on Appledore’s location, the company will be targeting five markets, including ferry, defense, commercial fabrication, oil & gas, and renewables. Both shipyards, Belfast and Appledore, will offer technical services, fabrication and construction, repairs and maintenance, in-service support, conversions and decommissioning services. While they will operate independently, Appledore will also be positioned to handle overflow and support work for Belfast.
The announcement of the acquisition to save the yard and resume work comes at a time when many shipyards are struggling to stay in business and received strong praise from the unions. Although the yard currently has no employees, it was highlighted that there was a strong and skilled labor pool in the region to support the resumption of work. The unions called on the UK Government to provide support and contracts to aid in restoring the yard’s operations.
UK Prime Minister Boris Johnson also visited the yard site highlighting its strong history and great future. Johnson agreed that it was important to create a strong stream of work for the yard to support employment in this region of England. Prior to closing, in 2018 the yard had approximately 200 employees.
InfraStrata, was created in 2008 as it then was known as Portland Gas in a demerged becoming a standalone company focused on infrastructure projects. The company currently has two major investments, an underground natural gas storage facility in Northern Ireland and Harland & Wolff. In announcing its new investment, InfraStrata highlighted its successes in the first moths of operating Harland & Wolff. They noted despite the impact on COVID-19 they had been successful at meeting a first milestone of servicing eight vessels. In the first phase of re-starting Harland & Wolff they highlighted a strategy that included undertaking minor repair work and now they are beginning to focus on negotiating for larger contracts. The company also continues to be in advanced discussions with the UK Export Finance Department to secure lines of financing on behalf of its overseas clients in order to provide working capital for larger projects at the shipyard.