Shaw Group wins auction for Stone & Webster business

Jul 07, 2000 02:00 AM

The Shaw Group announced that it was the successful bidder in the auction for the business of Stone & Webster ("S&W") in a proceeding under Chapter 11 of the US Bankruptcy Code. In the transaction, which is subject to bankruptcy court approval, Shaw will acquire substantially all of the assets and assume certain liabilities of S&W, for a total purchase price of approximately $ 38 mm in cash and approximately 2.5 mm shares of Shaw Common Stock. Shaw will also assume liabilities with a book value of approximately $ 450 mm and acquire assets with a book value of approximately $ 600 mm.

The combination of S&W's business, with its premier engineering capabilities and 110-year history, and Shaw's business, with its turnkey capabilities and extensive expertise in the world-wide piping industry, will create a unique, new model in the engineering and construction business. Moreover, Shaw's unparalleled experience and S&W's recognised leadership in the world-wide power market will form a dominant new force in the global power industry. The Shaw and S&W businesses had revenues of approximately $ 1.7 bn in 1999, and will move forward with a total backlog of work exceeding $ 2.0 bn.
J. M. Bernhard, Jr., Shaw's Chairman, President and CEO, stated, "After completion of the financial, operational and legal due diligence, we are very excited to announce that we have made a successful bid for the assets of Stone & Webster. With this combination, we believe that Shaw will be a leader in setting a new paradigm in an industry that has warranted change. Stone & Webster has a recognised name in the industry, and its premier engineering capabilities complement our strategy and recent strengthening in the power market, particularly our announced joint venture with Entergy. We plan to move quickly in closing the transaction, and upon doing so, will focus on integrating core capabilities and divesting non-core assets."

Shaw will continue to be headquartered in Baton Rouge, Louisiana, with operating facilities world-wide. The acquisition will initially bring Shaw's total employee count to approximately 13,000 people.
An integration team of Shaw executives and key S&W personnel, as well as outside resources, will immediately begin integrating Shaw and S&W's businesses, initially focusing on maintaining and enhancing customer relationships, supporting current project management, and retaining key personnel. Required Approvals Pending approval by the court, which is expected, Shaw anticipates closing the transaction.

The Shaw Group is the largest supplier of fabricated piping systems and services in the world, with unparalleled piping experience and expertise in the global power generation market. Shaw is also a leader in providing innovative solutions to the chemical and petrochemical processing, crude oil refining and oil and gas exploration and production industries. With over 7,500 employees world-wide, Shaw distinguishes itself by offering its customers comprehensive piping solutions consisting of integrated engineering and design, fabrication, erection and maintenance of piping systems and the manufacture of speciality pipe fittings and supports. The ability to provide comprehensive piping solutions enables the Company to be a cost-effective single-source provider of fabricated piping systems and services for projects around the world. The Company operates facilities in California, Louisiana, New Hampshire, New Jersey, Oklahoma, South Carolina, Texas, Utah, Virginia, Australia, the United Kingdom, Venezuela and Bahrain, where it has a 49 % interest in a joint venture.

Stone & Webster is a leading global provider of full-service, value-added engineering, procurement, construction, consultation and environmental services to the power, process, governmental and industrial markets. S&W is headquartered in Boston, Massachusetts and employs over 5,500 people at operations in the US and internationally.

Source: Business Wire
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