Babcock & Wilcox Reaches Agreement to Sell its Italian and Swedish Businesses

Rhea-AI Summary

Babcock & Wilcox Enterprises, Inc. (NYSE: BW) has announced an agreement to sell its Italy-based SPIG S.p.A. group and Sweden-based Babcock & Wilcox Vølund AB to funds managed by AUCTUS Capital Partners AG for approximately $40 million, subject to adjustments and expenses. The deal is expected to close at the end of October, pending customary closing conditions.

This divestment aligns with B&W's strategy to reduce long-term debt, improve its balance sheet, and increase liquidity. The company plans to focus on its core portfolio of technologies, including Thermal, Renewable, and Environmental solutions, as well as new technologies like BrightLoop™ and ClimateBright™. B&W is also supporting U.S. customers with coal-to-natural-gas conversions to meet emissions reduction needs while maintaining reliable baseload energy generation.

Positive

• Sale of non-core businesses for approximately $40 million
• Alignment with strategy to reduce long-term debt and improve balance sheet
• Increasing global demand for B&W's core portfolio of technologies
• Advancement of new technologies like BrightLoop™ and ClimateBright™
• Execution of multiple commercial projects

Negative

• Divestment of international operations in Italy and Sweden

Insights

Financial Analyst

The sale of B&W's Italian and Swedish businesses for $40 million is a significant move that aligns with the company's strategy to reduce long-term debt and optimize its capital structure. This divestiture of non-core assets should improve B&W's balance sheet and increase liquidity, which is important for a company with a market cap of $225 million.

The transaction's impact on B&W's financials could be substantial, potentially reducing debt-to-equity ratios and freeing up capital for core operations. However, investors should consider the potential loss of revenue streams from these divested businesses. The focus on core Thermal, Renewable and Environmental technologies, along with investments in new technologies like BrightLoop™ and ClimateBright™, suggests a strategic realignment towards higher-growth areas.

The mention of increasing global demand for B&W's core portfolio and the execution of multiple commercial projects indicates potential for future revenue growth. The emphasis on coal-to-natural-gas conversions also positions the company well in the evolving energy landscape, potentially opening up new market opportunities.

Energy Industry Expert

B&W's strategic move to divest its Italian and Swedish operations reflects broader trends in the energy sector. The focus on core technologies and new innovations like BrightLoop™ and ClimateBright™ aligns with the global shift towards cleaner energy solutions. This pivot could position B&W favorably in the rapidly evolving energy market.

The company's emphasis on coal-to-natural-gas conversions is particularly noteworthy. As utilities face increasing pressure to reduce emissions while maintaining baseload generation, B&W's expertise in this area could become a significant competitive advantage. This transition represents a important bridge technology in the energy sector's decarbonization efforts.

Investors should watch for B&W's ability to capitalize on these market trends and translate them into tangible project wins and revenue growth. The company's success will largely depend on its execution in core markets and its ability to commercialize new technologies effectively in a competitive landscape.

- B&W to receive approximately $40 million in cash at closing, subject to customary adjustments and expenses

- Action aligns with company’s stated strategy to reduce long-term debt and optimize capital structure

AKRON, Ohio--(BUSINESS WIRE)-- Babcock & Wilcox Enterprises, Inc. (“B&W” or the “Company”) (NYSE: BW) announced today it has reached an agreement to sell its Italy-based SPIG S.p.A. (SPIG) group of companies and Sweden-based Babcock & Wilcox Vølund AB formerly known as Götaverken Miljö AB (GMAB) to funds managed by AUCTUS Capital Partners AG, a European private equity firm, for approximately $40 million, subject to customary adjustments and expenses. The deal is expected to close at the end of October and is subject to the satisfaction of customary closing conditions.

“This sale aligns with our previously-announced strategy to divest certain non-core businesses and assets to reduce our debt, improve our balance sheet and increase liquidity,” Kenneth Young, B&W Chairman and Chief Executive Officer, said. “Moving forward, we continue to see steadily increasing global demand for B&W’s core portfolio of technologies that support increased global energy demand from utilities and various industries.”

“We also are continuing to advance our core Thermal, Renewable and Environmental technologies globally. We also continue to invest in our new technologies, including BrightLoop™ and ClimateBright™, and are beginning execution of multiple commercial projects,” Young said. “In addition, we’re supporting U.S. customers with our proven, reliable technologies as demand for coal-to-natural-gas conversions grows in response to the increased need for emissions reductions while maintaining reliable baseload energy generation. We look forward to moving forward with these and other projects to deliver environmentally conscious, technology driven solutions that support the global need for reliable, accessible and affordable energy.”

About Babcock & Wilcox

Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises, Inc. is a leader in energy and environmental products and services for power and industrial markets worldwide. Follow us on LinkedIn and learn more at babcock.com.

Forward-Looking Statements

B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to the sale of the Italy-based SPIG S.p.A. group of companies and Sweden-based Babcock & Wilcox Vølund AB, formerly known as Götaverken Miljö AB. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241010353339/en/

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.

FAQ

What businesses is Babcock & Wilcox (BW) selling?

Babcock & Wilcox (BW) is selling its Italy-based SPIG S.p.A. group of companies and Sweden-based Babcock & Wilcox Vølund AB (formerly known as Götaverken Miljö AB).

How much will Babcock & Wilcox (BW) receive from the sale?

Babcock & Wilcox (BW) will receive approximately $40 million in cash at closing, subject to customary adjustments and expenses.

When is the Babcock & Wilcox (BW) sale expected to close?

The sale is expected to close at the end of October, subject to the satisfaction of customary closing conditions.

What is the strategic reason for Babcock & Wilcox (BW) selling these businesses?

The sale aligns with B&W's strategy to divest non-core businesses and assets to reduce debt, improve the balance sheet, and increase liquidity.

What technologies is Babcock & Wilcox (BW) focusing on after the sale?

B&W is focusing on its core Thermal, Renewable, and Environmental technologies, as well as new technologies like BrightLoop™ and ClimateBright™.