Thursday, October 14, 2010

PEU's Sniff Around Nuclear Sub Builder

Northrop Grumman's shipbuilding unit is on the block, with five private equity underwriters (PEU's) inspecting the hull.  Four household PEU's, The Carlyle Group, Bain Capital, KKR & TPG, join mystery firm Cleveland Ship LLC in pursuit of the nuclear sub builder.

Future growth is expected from the Navy's new, double-hulled oil tanker.  Northrop might cash out at the top, normally a PEU strategy.  Time will tell if that's true, as well as which PEU wins the shipbuilding bomb.

Also, future conflicts or texting captains could drive refurbishing business.