Key U.S. Naval Infrastructure to Flow into the Hands of Lone Star Funds

Posted on 02/05/2023

On February 3, 2023, funds managed by global investment firm Carlyle (NASDAQ: CG) and private equity firm Stellex Capital Management sold Titan Acquisition Holdings, an American bi-coastal company in ship repair services and marine and heavy complex fabrication, to an affiliate of Lone Star Funds. The transaction is expected to close in 2023 upon satisfaction of customary closing conditions, including certain governmental approvals. Titan Acquisition Holdings was formed by The Carlyle Group and Stellex Capital Management following their 2019 acquisition of MHI Holdings and Vigor.

Titan is comprised of Vigor Industrial LLC, an infrastructure, defense, and maritime services company based in Portland, Oregon; MHI Holdings LLC, a ship repair, maintenance, and other ship husbandry services company based in Norfolk, Virginia; and Continental Maritime of San Diego (CMSD). Key Titan customers include the U.S. Navy, U.S. Coast Guard, Military Sealift Command, Boeing, cruise lines, fishing fleets, barges, ferry services for local and state governments, and other key commercial U.S. Government customers. Vigor Industrial owns Vigor Alaska, which operates the state-owned Ketchikan Shipyard. The Alaska Marine Highway System is the primary customer for the Ketchikan Shipyard. Vigor Industrial acquired Alaska Ship and Drydock in 2012.

Huntington Ingalls’ San Diego Shipyard was acquired by Titan Acquisition Holdings in 2020. Huntington Ingalls’ San Diego Shipyard is one of the largest fleet service and repair contractors for the U.S. Navy. MHI Holdings operates a berthing pier and a fabrication and repair facility at Hampton Roads, Virginia, near to the U.S. Navy’s largest East Coast base. Huntington Ingalls Industries is the largest military shipbuilding company in the United States

Jim “Marco” Marcotuli will continue in his current role as Titan Acquisition Holdings CEO, and other company leadership is expected to remain intact. The first sixteen years of Marcotuli’s career were spent in aerospace at General Dynamics Aeronautics which was acquired by Lockheed Martin.

Kirkland & Ellis LLP is serving as legal counsel and Lazard served as financial advisor to Lone Star Funds. Latham & Watkins, LLP is serving as legal counsel to Titan, Carlyle, and Stellex, and BofA Securities (Bank of America) and Evercore served as financial advisors.

Keywords: Carlyle Group.

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