U.S. Navy contracts aluminium shipbuilder Austal to build three medical ships for $1.3 billion

Austal, the renowned shipbuilder backed by the Forrest family, has reportedly secured a prestigious contract worth almost $1.3 billion for designing and constructing three medical vessels exclusively for the US Navy. This latest deal adds to the already impressive order book of $11 billion that the Perth-headquartered firm has accumulated.

Additionally, private equity funds are showing keen interest in the company, which speaks volumes about its reputation in the market. The three vessels, which will be built at Austal's shipyards in Mobile, Alabama, will serve as a testament to the company's reliability as a supplier of quality ships to the US Navy.

Project commencement 

Moreover, this deal has come at a crucial time as work on the Expeditionary Fast Transport program was nearing completion. Austal plans to initiate the construction of the medical vessels once it completes the last fast-transport expeditionary vessel, which is a great achievement for the company.

The company's deal worth $US867.6 million for the final design and construction of three Expeditionary Medical Ships will replicate the aluminium twin-hull catamaran fast transport expeditionary vessels that will be built at Mobile.

Austal's CEO Paddy Gregg, in his own words 

According to Austal's CEO, Paddy Gregg, the medical vessels will enable complex medical procedures and operations to be carried out while at sea. He has announced that the three emerging EMS will boost the US Navy's capability. These medical vessels will provide efficient medical and surgical support anywhere in the world. Austal's work in the US covers battleships, coastguard vessels, and components for the Virginia-class nuclear-powered subs. The shares of Austal rose over 5% to $1.82 in trading on Friday.

Austal's journey through the years  

Austal, an Australian shipbuilding company, has been a subject of takeover interest for almost two years. However, the US Navy has placed stringent change-of-control provisions on its agreements with Austal, which limits the company's potential buyers. Two US investment firms, Cerberus Capital Management and JF Lehman & Company, have emerged as the top contenders for the acquisition.

Andrew and Nicola Forrest, who own 19.6 per cent of Austal's shares through their private investment vehicle, Tattarang, have appointed former Australian rear admiral Lee Goddard as their representative on the Austal board. In summary, Austal's potential takeover and the involvement of various parties have been the subject of interest in the business world. 

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