Norwegian engineering and construction company Kvaerner has sold its onshore construction business in North America to Matrix Service Company for an enterprise value of USD 80.3 million. The divestment enables Kvaerner to focus its efforts on further developing its upstream oil and gas business, the company said in a statement on Monday.
“This transaction is an important step in our strategy to focus our operations. All of Kvaerner’s operations will now be focused on delivering offshore installations and onshore plants to our upstream oil and gas customers. The sale also provides us with increased strength to further develop Kvaerner’s position in our target markets,” says Jan Arve Haugan, President & CEO of Kværner ASA.
A definitive agreement was signed between Kværner AS and Matrix Service Company. In the transaction, Matrix will receive ownership of certain assets of Kvaerner North American Construction, Inc. in the US and the shares in Kvaerner North American Construction, Ltd. in Canada. The Business will continue to be led by their existing management and operational teams. In 2012, the Business delivered revenues of about USD 280 million and an EBITDA margin of approximately 5 percent. In total, the Business has about 200 employees in the US and Canada. Kvaerner will retain the assets and liabilities related to the contract with Longview Power LLC, including any financial effects of the arbitration.
John Hewitt, President and Chief Executive Officer of Matrix comments: “The Business has over 35 years of successful delivery of maintenance and capital construction services, and this transaction will provide Matrix Service Company with a unique service offering that complements and enhances our existing platform.”
In line with the upstream focused strategy, Kvaerner will continue to develop its Houston based entity focusing on offshore field development, Kvaerner Field Development Inc. Following the sale, Kvaerner will not have any remaining operations in the US within the Downstream & Industrials segment, and remaining legacies within the segment will be presented as discontinued operations in the company’s accounts going forward.
The transaction will be settled in cash at closing and is expected to be completed in late 2013, subject to anti-trust approval in the US. The financial effects of the transaction are expected to be recognised in Kvaerner’s fourth quarter 2013 accounts subject to final closing.
Press Release, December 09, 2013