Honolulu Shipyard changing hands

By Kelly Yamanouchi
Advertiser Staff Writer

United Defense Industries Inc. said it will buy the naval ship repair business of Honolulu Shipyard Inc. for $16 million.

Arlington, Va.-based United Defense is not acquiring the infrastructure of Honolulu Shipyard, but plans to retain its staff and continue operations at Pearl Harbor as Hawaii Shipyards Inc.

United Defense said the acquisition will make its subsidiary U.S. Marine Repair the largest private supplier of ship repair and overhaul services for naval vessels at Pearl Harbor. United Defense said it expects the deal to close within the next 75 days.

Honolulu Shipyard, a member firm of Pacific Shipyards International, has maintained a partnership with U.S. Marine Repair for repair and maintenance of Navy ships at Pearl Harbor since 2001. U.S. Marine Repair has provided management support for Honolulu Shipyard.

"We just felt that the timing was appropriate to solidify our position in the market," said United Defense spokesman Doug Coffey. "We already have significant operations in two of the Navy's largest seaports, Norfolk and San Diego, and this would provide us a permanent presence in the third largest home port of Pearl Harbor."

The purchase will allow U.S. Marine Repair to increase its efficiency in servicing the Navy's ships and submarines at Pearl Harbor, according to United Defense.

Honolulu Shipyard reported $40 million in revenues in 2003. United Defense's ship repair and maintenance work generated $526 million in revenue in the 12 months ended Sept. 30.

The Navy is U.S. Marine Repair's primary customer.

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.