Transaction Follows Comprehensive Marketing Process, Culminating in Winning Offer From a Consortium Led by Mason Capital Management
McDermott International has entered into an agreement to sell its CB&I storage business (CB&I) to a consortium of financial investors led by Mason Capital Management. Under the terms of the agreement, McDermott expects to receive $475 million of proceeds before taxes and transaction expenses. The transaction is expected to be completed in the fourth quarter.
The transaction is the culmination of a comprehensive marketing process during which McDermott received multiple bids from prospective buyers. Pursuant to the terms of McDermott's credit agreement, proceeds from the sale will be used to repay CB&I's existing term loan, cash collateralize certain McDermott letters of credit, and reduce an existing McDermott term loan.
'The significant interest expressed in our storage business is a direct reflection of its long history of providing customers world-class storage solutions and its bright future,' said Michael McKelvy, President and Chief Executive Officer of McDermott. 'We believe this is the best transaction for our business, CB&I, its customers and employees.'
CB&I has a global footprint and is a leading designer and builder of storage facilities, tanks and terminals. It became part of McDermott in 2018 when the two companies combined. In 2023, McDermott completed actions to strengthen the storage business, including providing a dedicated capital structure.
'We look forward to the next chapter in our 130-year history,' said Mark Butts, Senior Vice President of CB&I. 'The consortium represents a diverse group of shareholders who are familiar with our business and have long believed in and supported our strategy.'
'We are pleased to reach this agreement to acquire and serve as the future stewards of CB&I,' said Mike Martino, Managing Member and Principal of Mason. 'We believe the Company has significant potential as a standalone enterprise, and we look forward to leveraging our experience successfully investing in industrial and engineering-focused businesses to improve the Company's operations and support profitable, long-term growth.'
Goldman Sachs & Co. LLC is serving as the exclusive financial advisor for the transaction to McDermott. Kirkland & Ellis LLP is serving as legal counsel to McDermott. Citi is acting as exclusive financial advisor to Mason. Cadwalader, Wickersham & Taft LLP is serving as legal counsel to Mason Capital Management.
Source: McDermott
