LONDON IHC Merwede, the Dutch specialist shipbuilder, is negotiating new acquisition loans and is prepared to sell nearly half the company to outside investors as it eyes "sizeable" takeovers to fuel future growth.
IHC's president confirmed a recent Reuters report that the firm, which generates more than 1 billion euros ($1.4 billion) in revenues, was seeking new backers and had hired JPMorgan and Rabobank for advice.
Owned by the private equity arm of Dutch co-operative Rabobank RABN.UL, billionaire Cees de Bruin, and its own employees, IHC designs, builds and equips tailor-made vessels for dredging and for the offshore oil and mining industries.
"We are expecting all of our three major markets to grow substantially in the years to come," IHC President Govert Hamers told Reuters in a telephone interview.
"So we're actively looking for acquisitions, we're actively looking to expand the business, and therefore we're looking at how that is going to be financed and which shareholders fit that picture best."
IHC reported earnings before interest, tax, depreciation and amortization (EBITDA) of 101.9 million euros in 2009, on revenues of 1.126 billion. It publishes 2010 results in April.
Hamers said IHC could sell a mixture of new and old shares, giving new investors up to 49 percent in the company, but ruled out a majority stake sale.
He declined to place a value on IHC but said it was likely to enjoy a 10-percent increase in revenues in 2011 and "substantial" annual growth for at least five years.
The biggest potential deals concern technology companies and low-cost production, Hamers said. "We're looking at expanding our low-cost capacity for shipbuilding and equipment-building in the Far East," he said.
Hamers declined to give potential deal sizes, but said: "These are pretty sizeable acquisitions we are contemplating, given the size of our organization."
Hamers said IHC Merwede was also renegotiating its bank lending facilities and was seeking a new, larger acquisition facility. Its biggest lenders are Rabo, ING, Commerzbank and the Royal Bank of Scotland, and the bulk of its financing is in refund guarantees, a common feature in shipping finance.
IHC is likely to decide on both new investors and on its new financing "around mid-year," Hamers said.
IHC has prospered building one-off ships for dredging companies such as Koninklijke Boskalis Westminster NV (BOSN.AS). It is now betting on a surge in underwater mining, buying a South African marine-diamond firm MMP last year, and agreeing a mining joint venture with DEME of Belgium last week.
"We believe that the whole mining business will move offshore, just like oil and gas did in the past," Hamers said.
(Reporting by Quentin Webb; Editing by Will Waterman)