Just before Christmas, publicly traded Todd Pacific Shipyards announced that it received a $130 million offer from Vigor Industrial to purchase the Seattle-based company. If approved by shareholders, Portland, Ore.-based Vigor will pay $22.27 per share for all of Todd’s stock.
At the time of the announcement, Todd’s shares were selling for $21 per share.
Steve Welch, Todd Pacific’s CEO, told WorkBoat that up until Jan. 28, “We’re in a ‘go-shop’ period in which the company is able to entertain offers from other people who might want to buy it. The objective is really to provide the shareholders with the best possible value.” He declined to say if any other offers had been received.
Welch also said that Todd hadn’t been actively looking for buyers. “Frank Foti at Vigor and I have spoken a number of times over the past 15 years about the logic or wisdom of somehow combining our operations, and I think that while we generally agreed on the logic of it, the circumstances weren’t right for a transaction. But it looks like the time is right for a transaction now.”
Vigor Industrial is also in the ship construction and repair business with facilities in both Oregon and Washington. “We know each other fairly well,” said Welch. “Vigor works for Todd as a subcontractor frequently. They are one of our most highly regarded subcontractors, so we’re quite comfortable with the quality of their work.”
Becoming privately owned will be good for Todd’s business, according to Welch. “This is a bidding business and all of that disclosure [required for publicly traded companies]adds cost, and it also provides information to your competitors who laugh when I bring up the subject and say, ‘oh we would never read any of your reports.’ Then they cackle. Of course they’re reading the reports.”
If the shareholders approve the deal, Welch said he looks forward to “bringing together the two premier shipbuilding/ship repair companies in the Pacific Northwest.”
“This creates the most capable marine service provider in the region. I like to think that we, Todd, bring to the table a highly experienced workforce. We also have extensive experience managing large, complex government contracts, and you’re going to combine that with a very energetic, very entrepreneurial privately held company that has a variety of valuable assets.”
Welch said all existing contracts with customers and unions will remain in place after the sale.
Will the name of the 94-year-old company be changed?
“I don’t know the answer to that. I’m not sure they’ve decided what they’re going to do with the name.”