FILE
NO. 333-145588
FILED
UNDER RULE 424(b)(3)
PROSPECTUS
SUPPLEMENT No. 2
to
Prospectus dated December 19, 2007
ORION
MARINE GROUP, INC.
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This
prospectus supplement supplements the prospectus dated December 19, 2007,
as previously supplemented by prospectus supplement dated December 28, 2007,
relating to the resale of up to 20,949,196 shares of our common stock by certain
of our shareholders. The prospectus was filed as part of our
Registration Statement on Form S-1 (No. 333-145588).
Orion
Marine Group Announces Acquisition of Subaqueous Services, Inc.
On
February 29, 2008, OMGI Sub, LLC (“OMGI Sub”), a Florida limited liability
company formed to acquire and to own and to operate certain assets, and a 100%
directly-owned subsidiary of Orion Marine Group, Inc. (the “Company”) (the name of OMGI
Sub having been changed to Subaqueous Services, LLC (“SSLLC”) shortly after
closing) concurrently entered into that Asset Purchase Agreement dated February
29, 2008, between SSI and Lance Young, individually and as sole shareholder of
SSI, on the one hand, and SSLLC and the Company, on the other hand (“Asset
Purchase Agreement”) to purchase and closed the purchase of substantially all of
the assets (with the exception of liquid current assets) and related business
(principally consisting of project contracts) of Orlando, Florida-based
Subaqueous Services, Inc., a Florida corporation (“SSI”) for $35 million in
cash.
In
addition, SSLLC (i) paid SSI approximately $1.76 million in purchase price
adjustments for net under-billings and retained funds held under certain project
contracts and for transition support services to be provided by SSI through
September, 2008; and (ii) entered a three-year Consulting Agreement with the
sole shareholder of SSI, terminable on thirty (30) days prior written notice by
the parties thereto, for $150,000 per year payable monthly.
Each of
SSI and its sole shareholder, on the one hand, and each of the Company and
SSLLC, on the other hand, are jointly and severally liable for representations
and warranties respectively made and their respective covenants, agreements and
obligations under the Asset Purchase Agreement, including indemnification
obligations therein.
The
assets acquired consist primarily of marine construction equipment, which
includes several dredges. The Company also purchased construction
contracts in progress and the right to the name “Subaqueous Services” and
derivatives thereof. In addition, SSLLC has hired certain senior
managers of SSI and most of SSI’s field personnel.
The
Company funded the acquisition using a portion of its term loan bank facility
for the purchase price, and cash on hand for the other payments referenced
above. SSLLC will operate the acquired assets under the name “Subaqueous
Services, LLC,” and SSLLC will be based in Jacksonville, Florida. In that
regard, SSLLC entered a lease agreement with Hill Street, LLC effective February
29, 2008, for premises and facilities constituting those formerly occupied and
used by SSI for its Jacksonville, FL operations (“Lease
Agreement”).
The
purchase price of $35 million was funded entirely through borrowing under the
Company’s existing acquisition term loan facility, as amended by Amendment No. 1
thereto. In addition, from cash on hand provided by the Company, SSLLC paid
$60,000 for support facilities and services to be provided by SSI through
September 30, 2008, while the Company relocates SSLLC to facilities leased by
SSLLC in Jacksonville, Florida pursuant to the Lease Agreement. Also, from such
cash on hand, SSLLC paid approximately $1.7 million for existing payment
retentions and net overbillings/underbillings under the project contracts in
progress which SSLLC acquired.
The Asset
Purchase Agreement restricts SSI and its sole shareholder, Mr. Young, for a
period of three (3) years after closing of the acquisition, from competing with
SSLLC or the Company (including other subsidiaries of the Company) with respect
to heavy civil marine construction and related activities in Florida or the
Caribbean Region, and from soliciting customers or employees of SSLLC, the
Company or its other subsidiaries, for the same period of three (3) years from
the closing of the acquisition.
SSLLC
will operate the acquired assets under the name “Subaqueous Services, LLC,” and
SSLC will be based in Jacksonville, Florida. In that regard, SSLLC entered the
Lease Agreement with Hill Street, LLC, effective February 29, 2008, for premises
and facilities constituting those formerly occupied and used by SSI for its
Jacksonville, FL operations. The Lease is for a term of approximately three (3)
years (terminable by either party on six (6) months prior written notice), with
aggregate rental and other charges and fees of approximately $19,000 per
month.
Prior to
this acquisition, no relationship outside the ordinary course of business
existed between SSI and the Company or SSI and SSLLC.
SSI is a
specialty dredging services provider that focuses on shallow water dredging
projects in Florida and along the Atlantic Seaboard utilizing both mechanical
and hydraulic cutter suction pipeline dredging. Over its 25 year
history, SSI has provided services on projects such as the dredging of ports,
inlets, and Florida’s intracoastal waterways as well as wetland creation,
shoreline stabilization, beach nourishment, lake restoration, and port expansion
to a variety of private and public customers. SSI estimates its 2008
revenues will be between $40 and $45 million with comparable EBITDA margins to
Orion Marine Group’s long term goals.
Orion
Marine Group’s President and Chief Executive Officer, Mike Pearson, said, “This
acquisition adds hydraulic cutter suction dredging capabilities to our east
coast operations and allows the company to further expand its foot print for
turn-key marine construction capabilities in the Florida and Atlantic Seaboard
markets. By having this type of dredging services available in
Florida, we will have the opportunity to attract new projects with enhanced
capabilities to meet our customer’s complete marine contracting
needs.”
Subaqueous
Services, LLC President Curtis Huggins, formerly with SSI said, “We are excited
to be a part of the full-service capabilities Orion Marine Group
provides. Our services further compliment Orion Marine Group’s
Florida based marine operations with the equipment, manpower and expertise to
provide top-quality dredging capabilities as we work together to meet and exceed
our customers’ needs”.
Orion
Marine Group, Inc. provides a broad range of marine construction and specialty
services on, over and under the water along the Gulf Coast, the Atlantic
Seaboard and the Caribbean Basin and acts as a singlesource turnkey solution for
its customers’ marine contracting needs. Its heavy civil marine
construction services include marine transportation facility construction,
dredging, repair and maintenance, bridge building, marine pipeline construction,
as well as specialty services. Its specialty services include
salvage, demolition, diving, surveying, towing and underwater inspection,
excavation and repair. The Company is headquartered in Houston, Texas
and has a 70-year legacy of successful operations.
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Investing
in our common stock involves risks. You should read the section of
our Prospectus entitled “Risk Factors” beginning on page 10 for a
discussion of certain risk factors that you should consider before investing in
our common stock.
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Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
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You
should rely on information contained in this prospectus or in any related free
writing prospectus filed with the Securities and Exchange Commission and used or
referred to in an offering to you of these securities. Neither we nor
the selling shareholders have authorized anyone to provide you with different
information. The shareholders are offering to sell, and seeking
offers to buy, shares of common stock only in jurisdictions where offers and
sales are permitted. You should not assume that the information
contained in this prospectus is accurate as of any date other than the date on
the front of this prospectus.
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March 3,
2008
Austin 910108v1