Austal acquires engineering services firm

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HENDERSON, Australia, Oct. 5 (UPI) -- Australian shipbuilder Austal has expanded its capability to serve the Australian navy through a strategic acquisition.

Now part of Austal, which is building Littoral Combat Ships for the United States, are Hydraulink NT and its associated business KM Engineering.

HKME is a major provider of engineering services to the Australian navy and Australian Customs and Border Protection Services in northern Australia.

"Recognizing the growing significance of Asia Pacific to United States and Australian defense forces, Austal has entered into agreements to substantially expand its capability in Darwin." the company said.

"Darwin is critical to Austal's long-term strategy of supporting U.S. Navy operations, particularly as it relates to LCS and JHSV (Joint High Speed Vessel) operations. We expect to see these vessels in the region and want the Navy to know an experienced, professional and competent team is waiting for them" for maintenance, logistics and other services."

Under the deal, Austal's operations in Darwin will merge with those of HKME.

Terms of the transaction include a cash and restricted equity payment of about $8.1 million for an 80 percent stake in new business. Additional deferred entitlements of as much as $2 million will be available to the vendors subject to satisfaction of agreed performance-based conditions.