CB&I (The Woodlands, Rex; www.cbi.com) announced it has entered into a definitive agreement to sell its Capital Services business to an affiliate of private equity investment firm Veritas Capital for $755 million in cash.
“I would like to congratulate the Veritas Capital team in recognizing the inherent value of the Capital Services business. The divestiture is part of CB&I’s previously announced strategy to optimize our balance sheet, and with the tax benefit, the resulting cash proceeds will significantly enhance our debt ratio and delever our balance sheet,” said Philip K. Asherman, CB&I’s President and Chief Executive Officer. “We expect an additional positive impact on our overall business by recognizing cost synergies and ensuring our business is more aligned with our long-term strategy and end markets.”
CB&I’s Capital Services business provides services as a maintenance and modification contractor for the nuclear power industry, industrial maintenance industry and federal, state and local governments in the areas of operations and maintenance support services, environmental engineering and remediation, infrastructure engineering, procurement, construction, decommissioning, program management for disaster response, and recovery for private-sector customers and governments.
E. Chip Ray, Executive Vice President of CB&I’s Capital Services operating group, will continue to lead the business under Veritas Capital.
As a result of the sale, CB&I will recognize a pre-tax non-cash goodwill impairment charge of approximately $655 million in the fourth quarter of 2016. The transaction is expected to close in the second quarter of 2017.