McDermott May Sell Lummus
McDermott International, Inc. reported Friday that it has received “unsolicited approaches” exceeding $2.5 billion to acquire all or part of Lummus Technology and that it is “exploring strategic alternatives” for the business as a result.
The announcement comes two days after McDermott’s stock price plunged following a Wall Street Journal report that the firm had hired the turnaround consultant AlixPartners LLP to aid in improving its cash flow. McDermott subsequently confirmed that it was “taking positive and proactive measures … intended to improve its capital structure and the long-term health of its balance sheet.”
McDermott’s stock price closed at $1.58 per share on Thursday. At press time Friday, McDermott shares had rebounded dramatically to well over $2 per share following the Lummus announcement. Within the past year, the company’s share price peaked at $19.27 on Sept. 21, 2018.
Lummus licenses proprietary petrochemicals, refining, gasification and gas processing technologies and holds approximately 3,100 patents and patent applications, according to McDermott. An information sheet on McDermott’s website also states that Lummus supplies catalysts, equipment and related engineering services and employs more than 850 technology staff across five offices in four countries.
“Lummus is an excellent business, with incredibly impressive employees, that has earned a reputation for expertise, innovation and reliability in the refining and petrochemical industries,” David Dickson, McDermott’s president and CEO, said in a written statement emailed Friday morning to Rigzone. “The process of exploring strategic alternatives is part of our ongoing efforts intended to improve McDermott’s capital structure, and we plan to use the proceeds from any transaction involving Lummus Technology to strengthen our balance sheet. While Lummus is an important business within McDermott, we have decided to undertake a process to fully realize its strategic and financial value.”
McDermott also stated that it has retained the investment bank Evercore as the lead advisor on the Lummus strategic alternatives process. On a separate front, the company added that its previously announced processes to divest the remainder of its pipe fabrication and industrial storage tank businesses are ongoing.
To contact the author, email mveazey@rigzone.com.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension