Global Marine Holdings, in which HC2 holds an approximate 73% equity interest, has entered into a definitive agreement to sell 100% of Global Marine Group (GMG) to an investment affiliate of J.F. Lehman & Company (JFLCO).
The sale includes GMG’s operating subsidiary Global Marine Systems, a 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.
Total base consideration for 100% of GMG will be approximately $250 million in cash, subject to customary closing adjustments, plus a potential future earn-out should JFLCO and its investment affiliates achieve a specified multiple of their invested capital.
Combined with the stake sale of Huawei Marine Networks at a valuation of $140 million the total valuation for HC2’s Marine Services Segment is $390 million.
The GMG transaction is expected to close by the end of the first quarter of 2020.
Post-sale, the remaining 19% interest in Huawei Marine Networks that is under a two-year put option agreement will remain as an indirect subsidiary of HC2.
Philip Falcone, chairman, president and CEO of HC2, said: “Over the last five years, we have built a tremendous leading company in the marine services industry, led by Ian Douglas and his GMG team, and we know they will continue to build on their success while under the JFLCO umbrella.”
“We’re about to embark on a new chapter for Global Marine Group, and I want to thank the HC2 team for being effective owners of our business. The purchase by JFLCO provides the certainty that we need to continue to build our business across the telecommunications and utilities markets, deepening and widening the service we provide to our customers. We are fortunate to operate in markets that are transforming the world and we support the rising demand for connectivity of global communications and offshore renewable energy sources,” said Ian Douglas, CEO of Global Marine Group.
“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, comprehensive suite of unique services and assets, and talented workforce align well with our investment strategy.”