US engineering giant, McDermott International has completed the sale of its CB&I storage business (CB&I) to a consortium of financial investors led by Mason Capital Management.
Under the terms of the agreement announced last October, McDermott will receive $475 mill before taxes and transaction expenses.
"This transaction achieves a strategic goal set in motion last year and fully completes the separation of CB&I from McDermott," explained Michael McKelvy, the company’s President and CEO. "We will always have a shared history and know they will continue to lead the storage business under their new ownership."
Pursuant to the terms of McDermott's credit agreement, proceeds from the sale will be used to repay CB&I's existing term loan, cash collateralise certain McDermott letters of credit, and reduce an existing McDermott term loan.
CB&I is a designer and builder of storage facilities, tanks and terminals. It became part of McDermott in 2018 when the two companies combined. In 2023, McDermott took action to strengthen the storage business, including providing a dedicated capital structure.
Goldman Sachs served as the exclusive financial advisor for the transaction to McDermott. Kirkland & Ellis served as legal counsel, while Citi acted as exclusive financial advisor to Mason and Cadwalader, Wickersham & Taft served as legal counsel to Mason Capital Management.
