4:57 PM: Almost nine years after Vigor Industrial took over Harbor Island’s Todd Shipyard, Vigor has announced a sale and merger. Here’s the full announcement:

THE CARLYLE GROUP AND STELLEX CAPITAL MANAGEMENT TO ACQUIRE, MERGE MARITIME AND DEFENSE COMPANIES VIGOR INDUSTRIAL AND MHI HOLDINGS

Transaction to Create Bicoastal Platform of Scale Serving Defense and Commercial Customers

The combined company will create a bicoastal leader in critical ship repair services and commercial and defense-related fabrication services. Key customers include the U.S. Navy, U.S. Coast Guard, Military Sealift Command, Boeing, cruise lines, fishing fleets, barges and ferry services for local and state governments, and other key commercial and defense customers.

The transaction is subject to customary closing conditions and is expected to close by the end of the third quarter 2019. Financial terms were not disclosed.

Frank Foti, President and CEO of Vigor, said, “Through this transaction, Vigor gains responsible, forward-thinking investors who will seek to build on our current platform while maintaining a values-driven culture. In addition, we are excited to join forces with a company of MHI’s caliber which has a history of delivering strong results and shares our mission to serve the people who protect our country every day. This evolution takes us where we want to go, growing sustainable jobs into the future. I’m excited to be an investor in this adventure and to be a part of what’s to come.”

Tom Epley, President and CEO of MHI, said, “MHI is stronger than it has ever been, and we’ve successfully executed our strategy of delivering cost effective maintenance and repair solutions to the U.S. Navy, a job we take very seriously. We are excited to continue our partnership with Stellex and look forward to working with The Carlyle Group and our new colleagues at Vigor. The MHI leadership team and our 800 employees across MHI Ship Repair, Seaward Marine and Accurate Marine remain committed to our mission.”

Derek Whang, Principal at The Carlyle Group, said, “We look forward to working with our partners at Stellex, Vigor and MHI to create a stronger combined company of scale, capable of providing differentiated, coast-to-coast services to the U.S. Navy, U.S. Army and other defense, infrastructure, and maritime customers. Together, Vigor and MHI are well positioned with their unique, national assets to grow in the highly attractive ship repair and fabrication markets, supported by compelling sector dynamics.”

David Waxman, Managing Director at Stellex Capital, said, “We are thrilled to have partnered with the MHI management team to grow the business over the last four years, including through the acquisitions of Accurate Marine and Seaward Marine, and look forward to working with the combined management teams as we expand our geographical and customer mix. MHI’s commitment to its customers and its employees has been the foundation of its growth, and we welcome the partnership with Carlyle and Frank Foti in this next stage.”

The Carlyle Group will become majority owner of the combined company. Equity for the investment will come from the Carlyle U.S. Equity Opportunity Fund II, a $2.4 billion fund that focuses on middle-market and growth companies in the United States and Canada. As part of the transaction, Stellex Capital, MHI’s existing owner, will contribute new equity to the platform, while Vigor’s CEO Frank Foti will roll a portion of his existing Vigor ownership stake into the combined company.

A CEO search is underway for the new company. Tom Rabaut, former President and CEO of United Defense and a current Operating Executive at The Carlyle Group, and Admiral James Stavridis, a retired 4-star U.S. Navy officer, former NATO Alliance Supreme Allied Commander, and a current Operating Executive at The Carlyle Group, will both join the Board of Directors. Mr. Foti will also join the Board of Directors as Vice Chairman and will continue as Vigor’s CEO until a new CEO is retained. Tom Epley will continue to lead the MHI business.

Vigor Industrial LLC, majority-owned by CEO Frank Foti, is a provider of complex fabrication and ship repair services. It employs 2,300 people and operates eight drydocks across the Pacific Northwest and Alaska, including the largest floating drydock in North America. Vigor excels at ship repair, specialized shipbuilding, and other complex fabrication projects in support of aerospace, defense, and infrastructure end markets. While the company is widely known for building ferries, it also builds high-performance military craft for the United States and other allied foreign governments.

MHI Holdings LLC, owned by Stellex Capital, is a leading provider of full-range ship maintenance, repair, and modernization services to the U.S. Navy and Military Sealift Command in Norfolk, Virginia. MHI also provides hull cleaning, ship husbandry services, underwater painting and inspections, wastewater treatment, and chemical cleaning services globally. MHI is one of the only private shipyards in Norfolk that can service large surface combatants and amphibious ships.

Latham & Watkins LLP served as legal advisor to The Carlyle Group and Stellex Capital Management. DLA Piper served as legal advisor to MHI Holdings LLC and Stellex Capital Management. BofA Merrill Lynch, BNP Paribas, and Credit Suisse have agreed to provide debt financing for the transaction. Capstone Headwaters served as exclusive financial advisor to Vigor Industrial LLC, and K&L Gates LLP served as Vigor’s legal advisor.

We have a question out to Vigor regarding whether a name change will be part of the deal.

5:52 PM: Vigor spokesperson Athena Maris tells WSB, “No name change is anticipated. The acquisition is the culmination of a recapitalization process Vigor leadership began in early 2018 to replace existing investor capital with new long term capital with a global reach. Our shared goal is to create a stronger combined company of scale, capable of providing differentiated, coast-to-coast services to the infrastructure, aerospace and defense, and maritime markets.”

(WSB photo: Sheri Wallace and Maile Hudson)

Thanks for all the tips! Longtime customers are sad to hear that Jan’s Beauty Supply in the West Seattle Junction is closing – proprietor Sheri Wallace is retiring after more than three decades. We went over to talk with her after readers forwarded this email announcement sent to customers:

It is with extreme mixed emotions that we have decided to retire and close Jan’s Beauty Supply.

There are so many beautiful memories we have created together in the 36 years we have been in business. First and foremost, is the joy that Jan and I had working side by side for so long. She originally started this business and I was lucky enough to be able to join her after a few years. We are not only sisters but best friends forever!

To the hundreds of customers who have become close friends and have shared their life’s stories with laughter and tears, I will always treasure the many deep conversations we had. The most difficult part of this life transition is walking away from these relationships.

Some of our employees became family like our Alissa Cullen. She is and always will be a cherished member.

My two dear ladies now working with me have been a Godsend. They have supported me through some difficult times both physically and emotionally. Maile Hudson and Raelyn Barton will always have a special place in my heart and my life. They also have become like daughters to me.

Remembering the fun events we participated in like the Street Fair, Wine Walks, Holiday Happy Hours and many more will always leave me smiling.

We will be forever grateful for the wonderful customers who have allowed us to serve them. If I could reach out and hug every single one I would! There are not sufficient words to express my personal thanks but know I will never forget the love and support given to me by so many.

I am looking forward to more time with my husband, Pat and our Puppy! In addition to being able to create more memories with my grandsons, my supportive sister Holly and daughters, Stacy and Janny. I am incredibly fortunate to have had their support and I can now give them more of mine.

Sheri tells us that she’s expecting to remain open about another month – until late August. The shop’s been in the same location at 4517 California SW since her sister opened it, and she stresses – as detailed in her announcement – it’s simply “time.” They plan a variety of sales in the weeks ahead and are working on a schedule for those; we’ll publish a followup with that announcement when it’s available.