Wärtsilä acquires Vik-SandvikNews // July 3, 2008
Wärtsilä has acquired Norwegian ship design group Vik-Sandvik, a leading independent group providing design and engineering services to ship owners and the ship building industry worldwide.
Vik-Sandvik specializes in the design of high-end offshore vessels, as well as product and chemical tankers and more specialized vessels. It has for decades been recognised in the offshore market for its innovative designs and has achieved a strong global market position. As a part of Wärtsilä, the company has great potential for strong global growth and expansion into new market segments.
The company has its headquarters in Fitjar, in Western Norway, and it has operations in Norway, Poland, India, Brazil, Serbia, Bulgaria, Turkey, Russia and China. Vik-Sandvik has up to now been wholly owned by the Sandvik family.
Currently, Wärtsilä's ship design operations are carried out at its German company, Wärtsilä Ship Design Germany, and future ship design services will be combined within Wärtsilä Ship Design.
The value of the acquisition is Euros 132 million, with an additional maximum sum of Euros 38 million to be paid based on the performance of the business over the next three years.
In 2007, Vik-Sandvik's turnover was Euros 55 million and the profitability was on what Wärtsilä described as "a very good level." The number of employees at Vik-sandvik is 410.
"This acquisition is a major step in Wärtsilä's strategy to strengthen its position as a total solutions provider and to be the most valued partner for its customers. By combining ship design capability with its existing offering in propulsion systems and automation, Wärtsilä will be able to provide more added value to its customers, with further growth potential in new lifecycle services," said Wärtsilä. "Wärtsilä's goal is to become the leading provider of ship design services in various segments."
Said Wärtsilä: "The role of ship design is becoming more and more important due to higher performance requirements, more sophisticated systems, and increased integration onboard most vessels. Also, the environmental and emission regulations regarding NOx and CO2 are becoming increasingly stringent. Through this acquisition, Wärtsilä can offer competitive solutions that will lead to better total efficiency, improved environmental performance, and reduced life cycle costs for its customers."
"From a strategic point of view, the acquisition of Vik-Sandvik is a very important step for Wärtsilä as it brings us closer to our customers, both ship owners and ship yards. We can now enter into dialogue with them at an earlier stage, when the key specifications of a vessel are decided, and this will result in us being able to offer more competitive solutions," said Jaakko Eskola, Group Vice President, Wärtsilä Ship Power.
"Through this major acquisition, we also aim to take a leading position in ship design as an independent activity. We also strongly believe that this new and innovative way of combining ship design know-how and equipment solutions will make us a stronger partner when working together with other ship designers," said Mr Eskola.
"Vik-Sandvik's excellent know-how of ship design will further expand Wärtsilä's competitiveness. We will be able to offer our customers the best total solutions, regardless of equipment used. Our customers will have the freedom to choose the solution package that best suits their needs," said Arne Birkeland, President, Wärtsilä Norway.
"For Vik-Sandvik, this deal represents an opportunity to develop our business, in a way that meets the requirements of the market. We could have continued alone, but being a part of Wärtsilä, a leading equipment and after sales services provider with global presence, clearly has benefits. We believe this combination will create a unique and new kind of market leader", said Svein Sandvik, Managing Director, Vik-Sandvik.
Vik-Sandvik will be integrated into Wärtsilä Ship Design within Ship Power. All personnel - including the management - will continue as Wärtsilä employees. The acquisition is subject to relevant regulatory approvals, which are expected during the third quarter of 2008.
Arne Birkeland, 42, will be the head of the Ship Design unit. Mr Birkeland joined Wärtsilä in 2006, and currently holds several other positions within the company. Mr Birkeland is the President of Wärtsilä Norway AS, a Vice President of Wärtsilä Ship Power Technology, and a member of the Ship Power Management team.