Huntington Ingalls Industries [HII] on Tuesday said it has agreed to acquire Hyrdroid Inc. for $350 million in cash, adding field-proven products and know-how in small and medium autonomous unmanned underwater vehicles (UUVs) to go with its existing capabilities in large and extra-large UUVs.
Hydroid, which is based in Massachusetts, has about 230 employees and about $98 million in annual sales. The business is currently owned by Kongsberg Maritime, part of Norway’s Kongsberg Gruppen aerospace, defense and maritime company.
Hydroid’s largest customer is the U.S. Navy. The company also sells to some international and commercial customers
Hydroid develops and manufactures the Remus line of UUVs, including the Remus 100 man-portable UUV, the Remus 600 medium UUV, and the Remus 6000 large UUV. The company also provides a launch and recovery system for the medium and large UUVs.
Hydroid will become part of HII’s Technical Solutions division, which also manages the Proteus hybrid large underwater vehicle and partners with Boeing [BA] on that company’s Orca extra-large UUV for the Navy. Proteus is a dual-mode vessel that can operate manned and unmanned to deliver various payloads, including smaller UUVs, hundreds of miles.
The acquisition of Hydroid, which is expected to close in the first quarter of 2020 pending regulatory approvals, is “highly complementary” to HII’s existing UUV capabilities and represents a strategic growth area for the long term, Andy Green, president of Technical Solutions, told Defense Daily in a telephone interview on Tuesday.
“We expect growth in all segments of UUVs,” Green said. “The Navy is finding myriad uses for all UUVs” and the more they use them, the more ideas they get on additional capabilities and missions, he added.
Hydroid has the largest installed based of small and medium UUVs, Green said.
HII’s experience with Proteus and Orca combined with Hydroid’s experience developing, building, testing, integrating, deploying and operating UUVs throughout the life-cycle is foundational to the knowledge base required to keep advancing autonomous UUV technology, Green said.
HII said the value of the transaction will be reduced by tax benefits that are currently valued at more than $50 million.
Kongsberg acquired Hydroid in 2007 for $80 million.
HII’s financial adviser on the deal was Rothschild and Kongsberg used Philpott, Ball and Werner.
HII also said it has entered a strategic alliance with Kongsberg Maritime to jointly market naval and maritime products and services to the U.S. government and potentially global markets. The arrangement leverages both companies’ capabilities to enhance their respective offerings. The companies will also explore potential collaboration to create solutions and additional opportunities for growth.
“Hydroid’s advanced capabilities and reputation for excellence in autonomous and unmanned maritime systems provide the perfect complement to our existing unmanned operations, including Proteus in Panama City and our partnership with Boeing to produce the Orca XLUUV,” Mike Petters, HII’s president and CEO, said in a statement. “This transaction, along with the strategic alliance with Kongsberg Maritime, demonstrates our long-term commitment to the U.S. Navy, the U.S. Coast Guard and our national security customers and allies globally.”
Hydroid had over $13 million in operating income in 2019.
The Remus autonomous UUV technology was originally developed and licensed through an exclusive license with the Woods Hole Oceanographic Institution.