Gulf Island Fabrication, a Houston-based fabricator of specialized offshore structures, has completed the purchase of substantially all of Leevac’s machinery and equipment.
The purchase agreement between Leevac Shipyards, LLC and its related affiliates, and a Gulf Island subsidiary was made on December 23, 2015, and included Leevac’s leasehold interests at its marine fabrication facilities in Jennings, Louisiana and Lake Charles, Louisiana.
Additionally, in connection with the transaction, Gulf Island has entered into an agreement to lease Leevac’s marine fabrication facility in Houma, Louisiana. The purchase price for the Leevac assets was $20 million.
This price was subject to a working capital adjustment under which Gulf Island received at closing a dollar-for-dollar reduction for the assumption of certain net liabilities of Leevac and settlement payments from sureties on certain ongoing fabrication projects that were assigned to Gulf Island in the transaction. After taking into account these adjustments, Gulf Island received approximately $1.6 million in cash at closing. In addition, the transaction added approximately $112 million of incremental contract backlog.
Kirk Meche, President and Chief Executive Officer of Gulf Island said: “The closing of the acquisition of the LEEVAC assets accomplishes a key strategic initiative of management, expanding our marine fabrication and vessel repair and maintenance presence in the Gulf South market and diversifying our fabrication capabilities. I want to personally welcome the former Leevac employees who have joined our team.”