VT Group has brought forward its decision to sell out of its 150-year-old shipbuilding business because the current economic climate presents good opportunities for cash-rich companies looking for bargains.
The group will sell its 45 per cent stake in BVT Surface Fleet to its joint venture partner, BAE, for £380m in July, the earliest time VT can exercise the option to sell signed off by shareholders last year.
The deal, which has been given the go-ahead by the Ministry of Defence, will enable VT to concentrate on the support services business that already produces 80 per cent of its revenues.
Once BVT has been offloaded, the company will be looking for acquisition targets both here and the US, where it aims to almost double its $550m (£385m) turnover.
"If you've got cash in the bank, you're in a strong position these days," a spokesman for VT Group said. "In the current economic circumstances money goes further than it did 12 months ago. By doing this now, rather than in two or three years' time, we will be in a stronger position in terms of acquisitions," he said.
The company is looking at both defence and other sectors for potential targets, but is not yet holding any formal talks.
VT and BAE merged their shipbuilding businesses, which were two of the country's largest, last July. The joint venture deal allowed VT to opt to sell its stake from July this year.
VT's shipbuilding operations, then called Vosper Thornycroft, were based in Southampton for nearly 150 years before moving to Portsmouth in 2003.
The merged BVT employs 7,000 people and produces revenues of more than £1bn per year. It was part of the consortium that built the new destroyer that was delivered to the Royal Navy yesterday.
Despite a positive response from City analysts yesterday, VT Group's share price closed slightly down, off 1.5p at 596.5p.
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