A consortium of financial investors led by investment firm Mason Capital Management will acquire McDermott’s CB&I storage business (CB&I).
Under the terms of the deal, McDermott – a provider of engineering and construction solutions to the energy industry – expects to receive $475m of proceeds before taxes and transaction expenses.
The transaction is expected to be completed in the fourth quarter.
To remind CB&I 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 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,” said Mike Martino, managing member and principal of Mason.
Michael McKelvy, president and chief executive officer of McDermott, noted: “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.”
“We look forward to the next chapter in our 130-year history,” added 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.”
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.
