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WA-based construction and engineering services provider Civmec (ASX: CVL) has set a course to strengthen Australia’s sovereign shipbuilding capabilities through the $20 million acquisition of Luerssen Australia – the local subsidiary of a family-owned German company that specialises in defence contracts.
Civmec, led by Patrick Tallon and James Fitzgerald since 2009 following a management buyout of the business from VDM Group (ASX: VDM), is merging Luerssen with its existing portfolio comprising construction and engineering services to the energy, resources, infrastructure, marine and defence sectors.
It also cements an extended relationship with Luerssen on an Australian Navy shipbuilding program in Western Australia and South Australia.
The company, which last year relocated its head office from Singapore to Henderson in Perth, says the deal “marks a significant milestone in Civmec’s evolution as a sovereign Australian shipbuilder”.
The acquisition of Luerssen Australia, which is also based at the Australian Marine Complex in Henderson and will be renamed Civmec Defence Industries (CDI), will lead to the transfer of all assets, employees and licences to Civmec.
“By bringing Luerssen Australia into the Civmec Group, we are not only strengthening our position in the defence sector but also accelerating the development of our end-to-end shipbuilding capabilities,” says Fitzgerald, the executive chairman of Civmec.
“With a highly skilled workforce and established systems, we are well-positioned to deliver on current commitments and pursue future opportunities.
"Our focus now is on ensuring a seamless transition, maintaining program momentum, and building a platform for long-term growth in Australia’s naval shipbuilding industry.
“We are excited to have the Luerssen Australia team join CDI and are looking forward to working directly with the Commonwealth.”
Luerssen Australia is a division of Germany’s Lürssen group, a 150-year-old family-owned company based in Bremen that specialises in the design and manufacture of yachts, naval and coastguard vessels.
The Australian division, which also has operations in South Australia, was established to deliver the Royal Australian Navy’s Arafura Class Offshore Patrol Vessels under the SEA1180 program. The company has “multiple ships” under construction, says Civmec.
“We are proud of the foundation Luerssen Australia has built over the past eight years and the contribution it has made to Australia’s sovereign shipbuilding capability,” says Luerssen Australia’s chairman Tim Wagner, who is also CEO of the holding company NVL Australia GmbH that is being acquired by Civmec.
“This transaction represents a natural evolution in that journey. Civmec has been a trusted partner throughout the SEA1180 program, and we are confident in their ability to lead the next phase of delivery.
“NVL remains committed to supporting Civmec and the program through a structured transition and ongoing technical collaboration.
“We look forward to seeing the continued success of the Offshore Patrol Vessel program and the long-term benefits this partnership will bring to Australia’s defence industry.”
Civmec says the acquisition is pivotal to its long-term ambitions to become a sovereign Australian shipbuilder by providing the group with end-to-end capabilities from design to commissioning.
It also consolidates Civmec’s existing role in the SEA1180 program by giving the group direct control over program delivery, operational decision-making and future capability development.
Civmec sees opportunities for production efficiencies, accelerated delivery schedules and potentially new shipbuilding contracts coming its way following the buyout.
“It also fast-tracks the development of Civmec’s sovereign shipbuilding capabilities by integrating Luerssen Australia’s experienced workforce, established systems, and technical know-how, enabling the group to scale its defence operations and deliver five OPVs over the next 3.5 years,” says the company.
Civmec, which is also listed on the Singapore Stock Exchange, has operations in Newcastle, Gladstone and Port Hedland. The group expanded into the Australian defence sector in 2015 and was awarded its first contract for the SEA1180 program in 2018.
The acquisition follows a solid earnings performance by the group in FY24 when it delivered an 11.7 per cent increase in net profit after tax to $64.4 million as revenue surged 24.4 per cent to $1.03 billion.
In its recent third-quarter update, Civmec says nine-month revenue for FY25 was sitting at $661.3 million and net profit after tax at $34.6 million.
Civmec’s current order book stands at more than $760 million, up $127 million since the end of December last year with tendering activities across its operations at “historically high levels”. The company notes that it has current priced opportunities of close to $13 billion.
The acquisition of Luerssen Australia, which was flagged by the company late last year, is expected to be finalised on 1 July 2025.
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