Page 76: of Maritime Reporter Magazine (June 1999)

U.K. Maritime Report

Expansion Via Acquisition by David Tinsley, technical editor

In a remarkable series of moves, U.K. engineering groups have considerably increased their international market influence by absorbing prominent, North Euro- pean-based players in key sectors of the marine busi- ness. The momentum started to build when the TI

Group purchased the 70 percent balance of shares in the Dutch-based propeller and waterjet specialist Lips, and was carried forward by Vickers' agreement to buy the non-shipbuilding interests of Norway's similarly acquisitive Ulster organization. A new confidence in maritime-related activities was also expressed by Pow- ell Duffryn's takeover of Kvaerner Ships Equipment.

Each transaction has been characterized by the com- plementarity of the acquired product range, by pur- chasers' investment in niche market potential, and by the added scope created for offering integrated equip- ment and engineering 'packages'.

With its marine propulsion systems know-how, Lips represents a good strategic fit for TI, having been com- bined with the latter's seals and bearings specialist

John Crane Marine. The group's ability to better serve

Asian shipbuilding, which commands some 70-75 per- cent of the market, has also been strengthened by TI's increased shareholding from 50 to nearly 90 percent in seals and bearings maker Japan Marine Technologies, with which Lips has a close working relationship.

Nearly 98 percent of shareholders in both Vickers and the diversified manufacturer and technology firm

Ulstein gave the green light for the transaction where- by the U.K. specialist engineering concern bought all the Norwegian group's operations bar the shipbuilding division.

Apart from motion control specialist Brown Brothers in Edinburgh and Michell Bearings on Tyneside, Vick- ers' marine market standing has hitherto been attribut- able to its ownership of Swedish-based Kamewa, as a leading designer and supplier of propellers, thrusters, wateijets and winches. The Norwegian deal adds con- siderably to its stake in the business, through Ulstein's position as a producer and technology driver in medi- um-speed diesels, reduction gears, deck machinery, all types of thrusters, controllable pitch propellers, steer- ing gear, high-performance rudders, marine automa- tion and ship design.

It also substantially extends Vickers' international dimension as a result of the energetic acquisition pro- gram pursued by Ulstein since flotation in the fall of 1997, a process which has included the purchase of

U.S. firm Bird-Johnson, with its important position in the fixed pitch propeller and waterjet sectors.

As Vickers-Ulstein Marine, the new force in marine equipment, engineering and design technology, with a

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Similarly shaping a course for expansion in the marine business by taking over an established Scandi- navian, Powell Duffryn purchased Kvaerner Ships

Equipment for £34 million ($55 million) cash. By incorporating the previously Norwegian-owned group of companies within its subsidiary Hamworthy Marine, an influential new entity has been created, generating an annual turnover of around £120 million ($192 mil- lion) from both volume and high-technology products.

The move confirmed the publicly-quoted parent group's perception of Hamworthy Marine as a long- term, core business. Hamworthy has proved both com- mercially and technologically adept, and has shown a propensity for developing profitable niches and for acquiring complementary marine equipment firms. Its earlier purchases included Danish cargo pump maker

Svanehoj and the U.K. firm Industramar, which it had earlier bought the rights to the Schilling rudder design.

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Scandinavian union draws together the Hamworthy business in shipboard waste treatment systems, high- performance rudders, deepwell cargo pumps, engine room pumps, and compressors, and KSE's comprehen- sive involvement in cargo access equipment, plus its stake in higher added value sectors such as gas cargo plants, inert gas systems, and VOC (volatile organic compound) recovery systems.

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