Matthews Brothers Dredging (“MBD”) is a leading maintenance-oriented mechanical dredging business serving the U.S. Gulf Coast markets.
The majority of MBD’s revenue is derived from maintenance dredging services, which are mission critical and routinely performed every 1-3 years in waterways that accumulate sediment from ship traffic and runoff.
MBD has developed a unique “hybrid” approach to mechanical dredging that provides a cost-effective, operationally efficient service to its long list of blue-chip customers.
- Young and highly productive fleet, allowing for maximum dredging efficiency.
- Impressive free cash flow generation driven by high margins with limited NWC and maintenance capex requirements.
- Attractive return on growth capital with a payback period of ~1.5-3.0 years for a 20+ year asset based on historical utilization. Near-term opportunity to grow fleet to support growing customer base and expansion into adjacent geographic markets.
- Positive competitive dynamics with few large players in a fragmented industry.
- Significant barriers to entry include significant upfront capital requirements, safety record, rigorous customer requirements, operating history of performing jobs on-time and on-budget, and Jones-Act requirements.
- Strong alignment with CHP post-close as both owners remain involved with substantial retained ownership.