Street Calls of the Week
BATON ROUGE - BCP, a private equity management firm, announced Monday the completion of its previously announced sale of its stake in Brown & Root Industrial Services, a provider of specialty industrial services. Financial terms of the transaction were not disclosed.
BCP partnered with KBR, Inc. (NYSE:KBR) in 2015 to establish Brown & Root Industrial Services. During their partnership, the company expanded to more than 22 locations across the U.S., Mexico, and Canada, growing its workforce to over 10,000 employees.
"Brown & Root Industrial Services has been part of our story from the very beginning," said Mark Spender, Partner at BCP. "In today’s environment, where full exits are few and far between, we are especially pleased to have realized this investment on behalf of our limited partners."
The company serves clients in chemicals, energy, manufacturing, and government sectors, offering industrial engineering, construction, maintenance, turnarounds, and specialty services.
Andy Dupuy, CEO of Brown & Root Industrial Services, described BCP as "more than an investor" and "a true partner in our evolution" over the past decade.
Brown & Root Industrial Services traces its history back to the early 1900s. The company will continue operations under new ownership following this transaction.
Houlihan Lokey served as financial advisor and Kirkland & Ellis LLP as legal advisor to BCP for this transaction, according to the press release statement.
In other recent news, KBR Inc. announced a significant development with the approval of a tax-free spin-off of its Mission Technology Solutions segment, which is expected to create two independent, publicly traded companies by mid-to-late 2026. This strategic move will see New KBR focusing on Sustainable Technology Solutions, while SpinCo will handle government services. In addition, KBR secured a substantial $2.459 billion NASA contract to support astronaut health and related research, with the potential to extend the contract value to $3.6 billion through 2035. The company also won three contracts worth a combined $175 million from the Air Force Research Laboratory for defense technology development over five years.
However, not all recent developments have been positive for KBR. S&P Global Ratings revised its outlook on KBR to negative from stable, citing weaker-than-expected credit metrics and adjusting its FFO to debt expectations for the coming years. Adding to this, BofA Securities downgraded KBR’s stock rating from Buy to Neutral, following the Department of Defense’s cancellation of the $20 billion HomeSafe contract, which was anticipated to drive medium-term growth. These recent developments reflect a mix of opportunities and challenges for the company.
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