HOUSTON, Oct. 30, 2018 /PRNewswire/ -- McDermott
International, Inc. (NYSE: MDR) today announced it has completed a
comprehensive strategic review of its portfolio as part of the
integration process resulting from its combination with CB&I
earlier this year, reaffirming its commitment to McDermott's core
capabilities as a vertically integrated provider of technology-led
onshore and offshore EPC/EPCI services.
As a result of the review, McDermott has determined that its
storage tank business and its U.S. pipe fabrication business are
not core to the company's long-term strategic objectives as a
vertically integrated supplier with strong pull-through from
technology. In particular, McDermott has determined that these
operations offer limited pull-through or cross-selling
opportunities and, in some cases, their ability to pursue
third-party work aggressively can be hampered by internal
considerations. As a result, McDermott is developing plans to
seek buyers for each of the two businesses.
"These operations continue to perform well and offer competitive
differentiation on a standalone basis in their respective markets,
particularly global LNG and U.S. petrochemicals," said David Dickson, McDermott's President and Chief
Executive Officer. "The tank business in particular is known
as a world leader in its served markets. Our intent would be
to seek the kinds of owners who would value the significant
long-term growth potential of each business and who would thus
provide attractive prospects for employees and customers."
The two businesses, which McDermott expects to sell separately,
had combined 2017 revenues of approximately $1.5 billion, 2017 backlog of approximately
$1.4 billion and approximately 5,350
employees.
McDermott anticipates proceeds in excess of $1 billion and is targeting completion of the
transactions during 2019. It expects to use a majority of the
proceeds to reduce the debt under its $2.25
billion term loan.
McDermott will retain its fabrication yards that fit the
company's vertically integrated model with their ability to deliver
fully modularized and complete facilities for offshore and onshore
projects, located in Altamira,
Mexico; Batam Island, Indonesia; Jebel Ali, Dubai; Dammam, Saudi
Arabia; and Qingdao,
China.
About McDermott
McDermott is a premier, fully
integrated provider of technology, engineering and construction
solutions to the energy industry. For more than a century,
customers have trusted McDermott to design and build end-to-end
infrastructure and technology solutions to transport and transform
oil and gas into the products the world needs today. Our
proprietary technologies, integrated expertise and comprehensive
solutions deliver certainty, innovation and added value to energy
projects around the world. Customers rely on McDermott to deliver
certainty to the most complex projects, from concept to
commissioning. It is called the "One McDermott Way." Operating in
over 54 countries, McDermott's locally focused and
globally-integrated resources include approximately 40,000
employees, a diversified fleet of specialty marine construction
vessels and fabrication facilities around the world. To learn more,
visit www.mcdermott.com.
Forward-Looking Statements
In accordance with the Safe
Harbor provisions of the Private Securities Litigation Reform Act
of 1995, McDermott cautions that statements in this press release
which are forward-looking, and provide other than historical
information, involve risks, contingencies and uncertainties that
may impact McDermott's actual results of operations. These
forward-looking statements include, among other things, statements
about backlog, to the extent backlog may be viewed as an indicator
of future revenues or profitability, statements about McDermott's
intentions with respect to seeking certain owners for the
businesses, our expectations for selling the businesses separately,
anticipated proceeds from the sales and estimated timing for
completion of the transactions. Although we believe that the
expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will
prove to have been correct. Those statements are made by using
various underlying assumptions and are subject to numerous risks,
contingencies and uncertainties, including, among others: our
ability to market and sell the businesses on terms that we consider
acceptable, our ability to complete the transactions on the
anticipated timelines or at all, adverse changes in the markets in
which we operate or credit markets, our inability to successfully
execute on contracts in backlog, changes in project design or
schedules, the availability of qualified personnel, changes in the
terms, scope or timing of contracts, contract cancellations, change
orders and other modifications and actions by our customers and
other business counterparties, changes in industry norms and
adverse outcomes in legal or other dispute resolution proceedings.
If one or more of these risks materialize, or if underlying
assumptions prove incorrect, actual results may vary materially
from those expected. For a more complete discussion of these and
other risk factors, please see McDermott's annual and quarterly
filings with the Securities and Exchange Commission, including its
annual report on Form 10-K for the year ended December 31, 2017 and subsequent quarterly
reports on Form 10-Q. This press release reflects management's
views as of the date hereof. Except to the extent required by
applicable law, McDermott undertakes no obligation to update or
revise any forward-looking statement.
Contacts:
Investor Relations
Scott
Lamb
Vice President, Investor Relations
+1 832 513 1068
Scott.Lamb@McDermott.com
Global Media Relations
Gentry Brann
Global Vice President, Communications
+1 281 870 5269
Gentry.Brann@McDermott.com
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SOURCE McDermott International, Inc.