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McDermott to divest storage tank business

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Tanks and Terminals,

McDermott International Inc. has announced that it has completed a comprehensive strategic review of its portfolio as part of the integration process resulting from its combination with CB&I earlier this year.

As a result of the review, McDermott has determined that its storage tank business and its US pipe fabrication business are not core to the company's long-term strategic objectives.

In particular, McDermott has determined that these operations offer limited pull-through or cross-selling opportunities and, in some cases, their ability to pursue third-party work aggressively can be hampered by internal considerations.

As a result, McDermott is developing plans to seek buyers for each of the two businesses.

The two businesses, which McDermott expects to sell separately, had combined 2017 revenues of approximately US$1.5 billion, 2017 backlog of approximately US$1.4 billion and approximately 5350 employees.

McDermott anticipates proceeds in excess of US$1 billion and is targeting completion of the transactions during 2019. It expects to use a majority of the proceeds to reduce the debt under its US$2.25 billion term loan.

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