JFLCO to acquire Global Marine Group
IndraStra Global

JFLCO to acquire Global Marine Group

By IndraStra Global News Team

JFLCO to acquire Global Marine Group

On January 30, 2020, J.F. Lehman & Company (JFLCO), a leading middle-market private equity firm focused exclusively on the aerospace, defense, maritime, government, and environmental sectors announce that it is paying US$ 250 million to HC2 Holdings by entering into a definitive agreement to buy 100% of Global Marine Group (GMG)headquartered in Chelmsford, UK. GMG owns and operates a highly specialized fleet of marine equipment and vessels, including three cable installation and repair vessels, four cable maintenance vessels and 19 crew transfer vessels, enabling the Company to provide its suite of highly technical offshore engineering services quickly and effectively to customers anywhere in the world. 

The sale includes GMG’s operating subsidiary Global Marine Systems Limited, a leading provider of offshore engineering services to the telecommunications, renewables, and oil & gas industries, along with several joint ventures, and excludes the previously announced sale of GMG’s 49% joint venture with Huawei Marine Networks Co., Limited (HMN).

"Global Marine Group has been a market-leading provider of critical marine services for decades and is an exciting addition to the JFLCO portfolio of companies," said Alex Harman, a Partner with JFLCO. "The Company's strong market positions, a comprehensive suite of unique services and assets, and talented workforce align well with our investment strategy." Will Hanenberg, a Principal at JFLCO added, "We believe the Company has significant opportunities for growth in its core telecommunications and offshore wind markets, and we look forward to supporting the Global Marine Group team as it executes its exciting vision for the future."

Dick Fagerstal, Chairman of Global Marine Group commented, "I believe JFLCO is an excellent partner for GMG to help facilitate the next phase of our growth. Together with Ian Douglas, CEO of GMG, and the rest of the Global Marine Group management team, we look forward to leveraging JFLCO's extensive maritime experience and considerable capital base in further developing GMG's core business in the telecommunication and offshore wind markets." Ian Douglas added, "Additionally, we are excited about the prospect of developing new investment opportunities in related service areas while continuing to deliver high-quality subsea solutions to our global customer base."

The GMG transaction is expected to close by the end of the first quarter of 2020, subject to customary closing conditions, with proceeds delivered to HC2 at that time. After repayment of approximately $97 million of pension and debt obligations at GMG, as well as other customary closing adjustments, taxes, and transaction fees, HC2 will utilize the net proceeds it receives from the consummation of both the GMG and HMN sales to redeem a portion of HC2’s 11.5% Senior Secured Notes (the “11.5% Notes”) due 2021. The partial redemptions are expected to occur by the end of the second quarter of 2020.

Debt financing for the transaction was provided by Deutsche Bank. Winchester Capital served as financial advisor to JFLCO and Jones Day (lead counsel) and Blank Rome (maritime) provided legal advice. Deutsche Bank and ABN AMRO served as financial advisors to GMG and Hogan Lovells provided legal counsel.

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