Babcock & Wilcox Announces Agreement to Sell its Denmark-Based Renewable Parts and Services Subsidiary
Babcock & Wilcox has sold its Denmark-based Babcock & Wilcox Renewable Service A/S (BWRS) subsidiary to Hitachi Zosen Inova AG for $87 million, subject to customary fees and adjustments. The sale is part of B&W's strategic plan to reduce long-term debt and optimize its capital structure. BWRS, employing over 160 people, offers aftermarket parts and services for waste-to-energy plants in northern Europe and the UK. The transaction closed on June 28, 2024. B&W reiterates its Full Year 2024 Adjusted EBITDA target range of $105 million to $115 million, excluding BrightLoop and ClimateBright expenses. B&W will continue to focus on its core technologies and pursue a robust pipeline of opportunities in the renewable energy sector.
- Received $87 million in cash at closing.
- Sale aligns with strategy to reduce long-term debt and optimize capital structure.
- Reiterated Full Year 2024 Adjusted EBITDA target range of $105 million to $115 million.
- Sale of BWRS means divestment from a revenue-generating subsidiary.
Insights
The decision by Babcock & Wilcox (B&W) to sell its Denmark-based renewable services subsidiary for
The reiteration of their Full Year 2024 Adjusted EBITDA target range of
It's also worth noting that the sale proceeds will be used to support working capital. This means the company can reinvest in core operations or other strategic initiatives, potentially leading to future growth. Overall, the move appears to be a prudent financial decision aimed at strengthening B&W's balance sheet and creating a more agile and financially stable organization.
The sale of Babcock & Wilcox Renewable Service A/S to Hitachi Zosen Inova AG reflects a strategic alignment within the renewable energy market. By divesting this subsidiary, B&W is doubling down on its core competencies and shedding non-core assets. This is a strategic move to focus on high-value segments where it sees more growth potential. The renewable energy market, particularly in Europe, is evolving and consolidation is a common theme as companies strive for competitive advantages.
The emphasis on leveraging core technologies such as the DynaGrate® combustion grate and advanced emissions control technologies suggests that B&W aims to solidify its position as a key player in the clean energy sector. For retail investors, this strategic focus could mean that B&W is better positioned to capture market opportunities and drive future revenue growth in a rapidly expanding sector. However, it is also important to assess how the market reacts to this restructuring in the short term, as volatility could arise from such significant changes.
The transaction's impact on market dynamics, especially in northern Europe and the UK, will be interesting to monitor. This move could potentially lead to increased market share for Hitachi Zosen Inova AG in the waste-to-energy sector, while B&W can channel resources to more strategic initiatives. Retail investors should closely watch upcoming earnings reports and market reactions to gauge the effectiveness of this strategic shift.
- B&W received
- The sale aligns with B&W’s comprehensive business strategy to reduce long-term debt and optimize capital structure
- Company reiterates its Full Year 2024 Adjusted EBITDA target range of
BWRS, which employs more than 160 people and provides aftermarket parts and services for waste-to-energy plants in northern
“This transaction aligns with our previously announced intention to strategically sell certain non-core businesses and assets, and proceeds will be used to reduce our debt, increase our liquidity and support working capital,” Kenneth Young, B&W Chairman and Chief Executive Officer, said.
“Energy demand in the utility and industrial sector is rapidly increasing, which is reflected in our higher bookings and full-year outlook within our segments and businesses as we move forward. Accordingly, we are reiterating our previously stated Full Year 2024 Adjusted EBITDA target range of
“B&W is a leader in technologies that provide clean, renewable energy from waste, and we will continue to leverage our core technologies, including our advanced DynaGrate® combustion grate, state-of-the-art boilers, fuel and ash handling systems and emissions control technologies in the European and global markets to support new build and large upgrade projects,” Young added. “We’re excited about the robust pipeline of opportunities we’re currently pursuing and the opportunity to continue to work closely with customers in these markets well into the future.”
About Babcock & Wilcox
Headquartered in
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to the sale of its Babcock & Wilcox Renewable Service A/S subsidiary to Hitachi Zosen Inova AG, as well as its reiteration of its full year 2024 Adjusted EBITDA target. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties. For a more complete discussion of these risk factors, see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.
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Investor Contact:
Investor Relations
Babcock & Wilcox
704.625.4944
investors@babcock.com
Media Contact:
Ryan Cornell
Public Relations
Babcock & Wilcox
330.860.1345
rscornell@babcock.com
Source: Babcock & Wilcox Enterprises, Inc.
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