U.S. Military Support Provider to be Acquired by U.K. Counterpart

Griffin Services Inc. of Atlanta has agreed to be acquired by Vosper Thornycroft Holdings plc in a cash transaction worth up to $31 million. The deal was announced Nov. 8 by Los Angeles investment bank Houlihan Lokey Howard & Zukin, which served as financial advisor to Griffin Services.

The merger will unite two providers of technical services, base operations and maintenance support services to the governments of the United States and the United Kingdom.

The transaction will close upon receiving approval from the U.S. government. At the time of closing $19 million will be paid, and $12 million will be paid based upon future performance, according to Vosper Thornycroft, Southhampton, United Kingdom.

"Vosper Thornycroft's acquisition of Griffin Services reflects the logical continuation of U.S. and European defense industry consolidation," said Jerry Grossman, managing director at Houlihan Lokey. "Both companies rank among the leaders in government and defense services in their respective markets."

Griffin Services employs more than 1,500 people working on contracts for logistics services, operations and maintenance, engineering and technical services, alterations and construction and facilities-related services to the U.S. Department of Defense, federal civilian agencies, state and local governments and commercial enterprises.

Vosper Thornycroft employs 7,500 people in the United Kingdom, Europe, the United States and the Middle East. The company, a builder of warships and other vessels for the Royal Navy and overseas governments, earns 55 percent of its profits from other operations, including technical support, electronics and electrical systems, training, platform and equipment maintenance and facilities management.

"The U.S. defense market is by far the largest in the world, and we believe that opportunities for private sector service providers are growing. Griffin Services comes with a solid track record and is well positioned for further growth," said Martin Jay, chief executive officer of Vosper Thornycroft."

Jim Griffin will continue as chief executive officer of Griffin Services. He said the combination of the two companies would enhance their growth opportunities in the U.S. defense market.

"Vosper Thornycroft is ideally suited to pursue defense and commercial market objectives through Griffin Services. Technological and marketing advancements will proceed rapidly as a direct result of the merger," Griffin said.

Vosper Thornycroft's annual revenue is about £400 million, or $581 million. Griffin Services had revenue of $55 million and operating profit of $2.5 million in 2000, according to Vosper Thornycroft.