McDermott Announces Completion of CB&I Sale
McDermott International, Ltd has successfully finalized the sale of its CB&I storage business to a consortium of investors, emphasizing a strategic move towards greater operational focus. The agreement involved significant financial terms, with McDermott set to receive proceeds of $475 million before taxes and transaction expenses. This marks a pivotal transition that solidifies McDermott's mission of specializing in energy sector engineering and construction.
Strategic Implications of the Transaction
The completion of this sale reflects McDermott's commitment to streamline its operations and enhance its core competencies. "This transaction achieves a strategic goal set in motion last year and fully completes the separation of CB&I from McDermott," stated Michael McKelvy, President and Chief Executive Officer of McDermott. The decision stands as a testament to McDermott’s capability to navigate complex markets, ensuring stability in shareholder confidence and broader positioning in the energy sector.
Financial Structure and Future Directions
The funds acquired through this sale are earmarked for significant financial obligations, including repaying existing loans associated with CB&I and enhancing McDermott's financial structure. These actions illustrate a robust approach to managing debts and improving liquidity in a competitive landscape.
About McDermott International, Ltd
As a leading provider of integrated engineering and construction solutions, McDermott is recognized for its innovative methods and technology-driven approach. The company prides itself on its expertise in transitioning global energy resources into consumable products. With operations spanning over 54 countries and employing more than 30,000 individuals, McDermott stands out as a trusted partner in advancing energy projects responsibly and sustainably.
Enhancements Made Post-CB&I Acquisition
After the integration of CB&I in 2018, McDermott took strategic steps to enhance the storage business, including establishing a dedicated capital structure designed to bolster its positioning in storage solutions. These enhancements aim to facilitate larger, more complex projects, allowing McDermott to deliver exemplary outcomes for its clients.
Expert Guidance for the Sale
Goldman Sachs & Co. LLC served as the exclusive financial advisor to McDermott during this significant transition. Meanwhile, Kirkland & Ellis LLP provided legal support. For Mason Capital Management, Citi acted as the exclusive financial advisor, underscoring the careful planning and execution involved in this high-stakes transaction.
Looking Ahead for CB&I
With the transition of ownership to a consortium led by Mason Capital Management, CB&I is poised to continue its legacy as a global leader in the design and construction of storage facilities. The company’s extensive experience—having completed over 60,000 structures in its rich history—sets the stage for continued innovation and excellence in the storage sector.
Frequently Asked Questions
What was the purpose of the sale of CB&I?
The sale aimed to enhance McDermott's strategic focus on core operations while generating significant financial proceeds to boost liquidity.
Who is leading the consortium that purchased CB&I?
Mason Capital Management is the leading firm in the consortium of investors that acquired CB&I from McDermott.
What will McDermott do with the proceeds from the sale?
The proceeds will be used to pay down loans and strengthen McDermott's financial position through reduced debt obligations.
How many employees does McDermott have worldwide?
McDermott employs more than 30,000 individuals across various locations globally.
What services does McDermott provide?
McDermott provides engineering and construction solutions tailored for the energy sector, focusing on innovative and sustainable practices.
