Austal buys ATI, mulls contract changes

WA-based shipbuilder Austal has bought defence services provider Australian Technology Information and confirmed the US Navy has asked the company to change its contract to build 10 new ships.

ATI is a Canberra-based company that provides services including systems engineering and integration, information technology, verification and validation systems and deployable tactical command centres.

"This is a strategic acquisition which further enhances Austal's capability as a defence prime contractor," Austal chairman John Rothwell said in a statement.

Austal is finishing its second high-speed surface ship (USS Coronado) for the US Navy and is building the first two of five catamaran joint high-speed vessels for the US Department of Defence.

Austal did not disclose the price it paid for ATI, but it said ATI's turnover in 2009-10 was $6.1 million.

In a separate statement to the Australian Securities Exchange today, Austal said it had received from the U.S. Navy the draft modification to the contract for the Littoral Combat Ship tender.

The Navy proposed to award both Austal and Lockheed Martin a 10-vessel contract each.

The due date for the submission has been extended until tomorrow and the company expected to update the market tomorrow.

"Austal is presently reviewing the terms of the draft modification and has not made a decision as to whether it will agree to the proposal," the company said.