Trinity Yachts’ New Orleans shipyard is for sale, as well as the Trinity Yachts name, brand and all of the designs and engineering to date, as the company’s new owners continue to focus on offshore drilling.
The price is about $30 million, a figure that includes more than 20 fully engineered designs, the 48-acre shipyard and a partially built 51-meter yacht, but the final price will depend on what buyers are looking to acquire, says Trinity’s chief operating officer, Billy Smith. As of early October, various parties were looking at the yard with different interests. “[The price] fluctuates with, are they buying the entire shipyard or are they buying the name, the designs, which include hull T-052 [under construction],” Smith says. “So all of that is to be decided between the parties.”
The news follows the June 25 purchase of Trinity by Harvey Gulf Shipyard Group, a company that specializes in providing vessels to service the offshore oil and gas industry. That company is keeping the Gulfport, Miss., Trinity yard to continue building commercial vessels.
“The new owners recognize their core business is servicing the offshore oil and gas industry, and they understand, while [it] is viable, the New Orleans yard represents more capacity than they’ll need for the foreseeable future,” Smith says.
After the June acquisition Smith, along with fellow Trinity veterans that include John Dane, left because Harvey Gulf Shipyard had come with its own executive team, Smith says. But about a week afterward, he says, he met with the new chairman and CEO for what he thought was a casual breakfast. The discussion soon centered on the capabilities of the shipyard, the uniqueness and quality of the workforce and the current state of the yacht market, as well as other potential markets for the New Orleans shipyard.
A few hours later, Harvey Gulf Shipyard offered him the COO position at Trinity Yachts. “One of the most respected professionals in the maritime industry, Billy brings not just an institutional knowledge of Trinity and Gulf Coast Shipyard Group, but also deep relationships with national and international contacts in the boatbuilding community,” Harvey Gulf CEO Shane Guidry saysin a statement about the appointment.
“It’s going to be very interesting to see how it plays out, but I’m glad that the current owners decided to keep the operation intact,” says Smith. “If they don’t get a fair value, they’ll continue to build and repair yachts. It’s not a distressed sale — they just feel it’s not their core business but would like to see a new owner keep the shipyard and the Trinity name going.”
Harvey Gulf Shipyard is the first company in the United States to operate a vessel on liquefied natural gas. It was built at the Gulfport shipyard that was formerly part of Trinity Yachts and delivered last March. Another was to be delivered shortly, and four more of the 302-foot by 64-foot vessels are under construction.
Delays in environmental and regulatory approvals made the building of the first vessel difficult, Smith says. “The first boat was delayed over 54 weeks just on regulatory issues,” he says. “It’s always expensive to bring new technology to the market.”
In addition, crude oil prices are so low that the offshore drilling market hasn’t been as robust as in the past, hence the excess capacity with the New Orleans shipyard.
Trinity Yachts has under construction hull T-062, a 193-foot trideck motoryacht that will be delivered early next year. The yard is also building the first in a new class of 95-foot pushboats that will have 3,000 hp. The company is ready to finish two stalled projects, a 168-foot tri-deck motoryacht and a 167-foot tri-deck motoryacht.
Atlanta-based Mensura Capital is tasked with organizing the transaction. There has been interest from European service and repair yards keen on expanding their superyacht service capabilities in the U.S.
“There is no proper yacht yard to go to in the U.S. for servicing 300-foot and above superyachts, and there are maybe one or two in Europe,” Smith says. “Since the controlling water depth to the yard is 30 feet and the shipyard has a half-mile of deep-water frontage, a new owner can bring in drydocks and transform the shipyard into a world-class superyacht repair facility.
“They may want to focus on service and repair, they may want to focus on new construction, as we have in the past, or a combination,” Smith says.
There are opportunities for recreational industry companies, as well as those who are interested in the military element. “The new buyers can also continue to build military vessels, as we have done at this yard,” Smith says. “There won’t be restrictions on what kind of vessels the yard can build. In the past there is quite an impressive history of building military vessels, going back to World War II with Higgins Shipyard.”
The Higgins yard played a crucial role during the war, with its landing craft and navy vessels, but it also built pleasure boats.
The National WWII Museum in New Orleans is in the midst of a multiyear project to restore a historic PT boat built by Higgins Industries. PT-305 served in the Mediterranean Theater of Operations and was known by several nicknames, including the Sudden Jerk, the Bar Fly and the Half Hitch. That boat was commissioned Dec. 8, 1943, at the Industrial Canal plant, now known as Trinity Yachts, which is the last remaining active Higgins shipyard from WWII.
The other scenario is a small group of investors buying the company, Smith says. “Five to 10 yacht owners or businessmen get together, who may not want to buy a whole yacht yard but want to invest in the business, with each owning a certain percentage,” he says. “There have been potential investors that have watched us from the sideline as we’ve struggled with the depression in the yacht business and with the difficulty getting this first LNG boat accepted by the Coast Guard. They realize this may represent a good opportunity to enter the business at a reduced risk.”
The key is that the shipyard is a turnkey operation, not a shuttered facility, Smith says. The yard employs about 100 people — down from 550 before Hurricane Katrina in 2005. The yard got up to about 350 workers after the storm, with another 800 at the Gulfport facility. The core group of 100 could easily be ramped back up with the rich labor pool in New Orleans, he says. The yard is now protected by a 17-foot levee that was built after Katrina. The shipyard, though spared in the storm, was without electricity and had few workers. Within a week of the storm, Trinity bought the Gulfport shipyard and offered employees on-site housing; as many as 500 employees lived in trailers the company had also purchased. Within 11 months, the New Orleans yard was back up and running.
Thus far, various groups can see the benefit of the yard because “they can get these big yachts in there and service them,” Smith says. “And they’re 10 miles from the French Quarter, so crews don’t mind coming to New Orleans. Whoever acquires the yard, the name and designs, they can do construction, repair or build military vessels.”
There are also more than 20 designs that are fully engineered and have been built, which alone represents close to $50 million, Smith says. “We’ve built displacement steel, aluminum semidisplacement yachts, aluminum planing yachts and mega sportfishing yachts, and we’ve also built the all-steel explorer yachts,” Smith says. “So we’ve got 55 vessels out there in service right now.
“We’re trying to make it so the shipyard will remain active and that there will be a smooth transition in ownership,” he says. “The shipyard didn’t miss a beat on June 25 when it changed hands. We’re hoping we’ll be able to do the same thing one more time.”
This article originally appeared in the November 2015 issue.