NEW YORK - In a significant move for the energy infrastructure sector, a consortium led by Mason Capital Management LLC, along with IES Holdings, Inc. (NASDAQ: IESC), and several other investment firms, has reached a definitive agreement to acquire the CB&I storage solutions business from McDermott International, Ltd. The transaction is set to establish CB&I as a strong, independent entity with a debt-free balance sheet.
CB&I, known for its advanced storage facilities construction for various sectors including energy and industrial markets, is poised to continue its legacy under the new ownership. The company, which has been in operation since 1889, boasts a workforce of over 4,000 employees and maintains a presence in North America, the Middle East, and Asia.
Mike Martino, Managing Member and Principal of Mason, expressed confidence in CB&I's potential as a standalone company and committed to enhancing its operations for profitable growth. Mark Butts, Senior Vice President of CB&I, echoed this optimism, highlighting the financial stability and independence the transaction will bring. He also emphasized the company's commitment to delivering innovative solutions in collaboration with customers and suppliers.
The acquisition, funded entirely by equity, is expected to close in the fourth quarter of 2024, subject to customary closing conditions. Post-acquisition, CB&I will benefit from a new revolving credit facility arranged by Citi, which will enhance its competitive edge in pursuing new and existing projects.
The strategic move is seen as a response to the growing demand for infrastructure and energy projects, particularly those related to the global shift towards energy transition storage solutions. Mason Capital Management LLC, known for its value-driven investment approach, is anticipated to leverage its experience to further CB&I's market leadership in the storage solutions industry.
This news is based on a press release statement and provides an overview of the planned acquisition, highlighting the future prospects for CB&I as it transitions to operate as an independent company with robust financial backing.
In other recent news, IES Holdings, Inc. has reported significant financial growth for its third quarter ending June 30, 2024. The company's revenue surged by 31% to $768 million, while its operating income rose to $90.2 million, a 163% increase from the previous fiscal year. Net income attributable to IES for the quarter was $62.1 million, marking a 175% increase from the prior year's quarter. The company's backlog, indicative of ongoing growth, stood at approximately $1.7 billion.
Further, IES Holdings continued its share repurchase program, with $20.9 million in shares repurchased during the third quarter and a new $200 million share repurchase program authorized post-quarter. In other company developments, IES Holdings announced the addition of John Louis Fouts, a seasoned investment expert, to its Board of Directors.
In contrast, the company also reported the resignation of Elizabeth D. Leykum from its Board of Directors, citing other commitments as the reason for her departure. These are among the recent developments at IES Holdings.
InvestingPro Insights
IES Holdings, Inc. (NASDAQ: IESC), a key player in the consortium acquiring CB&I, has shown remarkable financial performance recently. According to InvestingPro data, IESC's revenue growth stands at an impressive 17.56% over the last twelve months, with a notable 31.48% quarterly growth in Q3 2024. This strong growth trajectory aligns well with the company's strategic move to participate in the CB&I acquisition.
The company's financial health appears robust, with an EBITDA growth of 119.12% in the last twelve months. This significant increase in earnings before interest, taxes, depreciation, and amortization suggests that IESC is well-positioned to support its part in the CB&I acquisition and potentially benefit from the synergies that may arise from this strategic move.
An InvestingPro Tip highlights that IESC is "Trading at a low P/E ratio relative to near-term earnings growth." This could indicate that the market has not fully priced in the company's growth potential, including the potential benefits from the CB&I acquisition. Another relevant InvestingPro Tip notes that IESC "Operates with a moderate level of debt," which may provide the financial flexibility needed for such strategic investments.
For investors interested in a deeper analysis of IESC's financial health and growth prospects, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's position in the market.
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