By Calvin Biesecker
As part of its ongoing process of exploring strategic alternatives for its shipbuilding business, Northrop Grumman [NOC] on Friday filed with the federal government for a potential spin-off of the segment.
The Form 10 registration with the Securities and Exchange Commission (SEC) “is the initial step toward executing a spin-off,” the company said.
Northrop Grumman in July announced that it was looking to divest the shipbuilding business, which has operations in Louisiana, Mississippi and Virginia, with the preferred result being a spin-off rather than a sale (Defense Daily, July 14 and 15). The company’s leadership prefers a spin-off as a means to unlock shareholder value on a timelier basis although they haven’t ruled out a sale.
Indeed, at least several bidders have emerged for the company, most of them private equity firms although one small ship design and support firm is making a long-shot attempt to also purchase the shipbuilding division (Defense Daily, Oct. 6).
Just this week Cleveland Ship LLC, a small ship design firm based in Ohio, sent letters to the governors of Louisiana, Mississippi and Virginia, expressing its commitment to the shipyards in their respective states. As part of its plans for shipbuilding, Northrop Grumman has said it plans to consolidate its Gulf Coast ship work at its Pascagoula, Miss., facilities.
The SEC filing on Friday was actually made by New Ships Inc., a holding company established by Northrop Grumman related to the potential spin off. The document was signed by Mike Petters, president of Northrop Grumman Shipbuilding and president and CEO of New Ships.