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Combined companies will be headquartered in Gulfport

Friede Goldman, Halter Marine merger creates industry giant

GULFPORT — The proposed merger between Friede Goldman International Inc. and Halter Marine Group Inc., would create a combined workforce rivaling that of Ingalls Shipbuilding, the largest private employer in the state.

The new company — to be named Friede Goldman Halter Inc. — will be based in Gulfport, and will have a combined workforce of about 11,300. Ingalls employs about 11,500 in Pascagoula. Friede Goldman has about 4,300 employees at their shipyard in Pascagoula, and another 1,000 employees at locations in Jackson, Houston, New Orleans, Canada and France. Halter Marine has about 6,000 employees at shipyards in Mississippi and elsewhere. The two companies have signed a “merger of equals” agreement that exchanges each share of Halter stock for 0.4614 of a share of Friede Goldman. Based on the closing price for Friede Goldman stock on June 1, the exchange rate values Halter shares at $7.55, or a 28% premium over the average for the 30 trading days that ended May 25.

Following the merger, the combined companies will be headquartered in Gulfport. Friede Goldman chairman and chief executive officer J.L. Holloway will serve as chairman and CEO of Friede Goldman Halter, with Halter chairman, president and CEO John Dane III serving as vice chairman, president and chief operating officer. The agreement between the companies provides for a management successor plan that is intended to result in Dane succeeding Holloway as chairman and CEO in two years.

The merger agreement, which is subject to shareholder and regulatory approvals, is expected to close in the fall of 1999.

“Our customers will benefit not only from these greater efficiencies but from the commitment to quality and timely deliveries that have been a hallmark of both companies,” Holloway said. “Our employees will benefit from the stability that comes with a strong backlog and, most importantly, our shareholders will benefit from the increased operating and financial synergies that the merger will provide.”

Holloway said the merger also offers instant diversification for Friede Goldman shareholders because Halter Marine’s strong presence in the commercial and government markets will help provide additional revenue visibility to help the combined company weather the cycles of the offshore energy industry.

Dane said Halter’s business process re-engineering program has identified significant opportunities that come from a large-scale vessel manufacturing organization.

“Friede Goldman’s production and engineering teams have ably proven their expertise in the rig construction business,” Dane said. “By combining the best practices of each segment, the combined company will be able to offer high-quality products at prices and delivery schedules that will satisfy both customers and shareholders.”

Holloway said the merger will allow the companies to combine design and engineering talents. “Together, the Friede Goldman Halter team will have more than 400 engineering professionals and can design and build the world’s most advanced offshore marine equipment.”


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