-=McDermott (MDR) : Subsea 7 (SUBCY) makes $7.00/share proposal

• Luxembourg’s Subsea 7 disclosed on Monday that it made a $2bn proposal for McDermott that is contigent on the US group dropping its planned tie-up with Chicago Bridge & Iron Company.

McDermott: Subsea 7 (SUBCY) makes $7.00/share proposal to acquire McDermott 

Subsea 7 proposed to acquire McDermott common stock for USD 7.00 per share, payable entirely in cash or up to 50% in Subsea 7 stock and the balance in cash. The proposal is subject to the termination of McDermott's pending transaction with CB&I (CBI).

• On April 20, 2018, the Board of Directors of McDermott rejected Subsea 7's proposal.

=Chicago Bridge & Iron (CBI) to be acquired by McDermott (MDR) in $6B all-stock deal

CB&I is a large engineering, procurement and construction company with its administrative headquarters in The Woodlands, Texas. CB&I specializes in projects for oil and gas companies.

  

• Headquarters: Netherlands
• cbi.com
• The combined company will be fully vertically integrated, providing engineering, procurement, construction and installation to the onshore and offshore energy sectors. It's expected to have revenue of $10 billion and a backlog of about $14.5 billion on a pro-forma basis.

CB&I (CBI) and McDermott (MDR) to merge in $6 bln deal CB&I shareholders will be entitled to receive 2.47221 shares of MDR 

McDermott (MDR) and CB&I (CBI) have agreed to combine in an all-stock transaction to create a premier fully vertically integrated onshore-offshore company, with a broad engineering, procurement, construction and installation service offering and market leading technology portfolio.

• McDermott shareholders will own ~53% of the combined company on a fully diluted basis and CB&I shareholders will own ~47 percent.
• CB&I shareholders will be entitled to receive 2.47221 shares of McDermott common stock for each share of CB&I common stock owned (or 0.82407 shares if McDermott effects a planned three-to-one reverse stock split prior to closing), subject to any withholding taxes. The estimated enterprise value of the transaction is ~$6 billion, based on the closing share price of McDermott on Dec 15, 2017. Values CBI at $18.76 based on MDR closing price.
• On a pro forma combined basis, McDermott and CB&I would have combined revenues of ~$10 billion and a backlog of ~$14.5 billion. The combined co is expected to generate EBITDA growth and strong free cash flow, enabling it to rapidly de-lever.
• The transaction is expected to be cash accretive, excluding one-time costs, within the first year after closing. It is also expected to generate annualized cost synergies of $250 million in 2019. This is in addition to the $100 million cost reduction program that CB&I expects to have fully implemented by the end of 2017.
• David Dickson, current President and Chief Executive Officer of McDermott, will be President and Chief Executive Officer of the combined company. 

Description

Chicago Bridge & Iron Company N.V. provides services to customers in energy infrastructure market. The Company provides services, such as conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management and environmental services. Its Engineering and Construction segment provides engineering, procurement, and construction (EPC) services. Its Fabrication Services segment provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules, and manufacturing and distribution of pipe and fittings. The Technology segment provides process technology licenses and associated engineering services, and catalysts, for petrochemical and refining industries, and offers process planning and project development services.

Key stats and ratios

	Q3 (Sep '17)	2016
Net profit margin	0.26%	-2.25%
Operating margin	0.71%	-1.36%
EBITD margin	-	7.06%
Return on average assets	0.25%	-2.82%
Return on average equity	1.09%	-18.27%
Employees	42,100

=Chicago Bridge & Iron (CBI) reported earnings on Mon 30 Oct 2017 (a/h)

• Chicago Bridge & Iron misses Street 3Q forecasts

THE HAGUE, Netherlands (AP) _ Chicago Bridge & Iron Co. (CBI) on Monday reported third-quarter net income of $10 million.

The The Hague, Netherlands-based company said it had net income of 10 cents per share. Earnings, adjusted for one-time gains and costs, came to 34 cents per share.

The results fell short of Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 53 cents per share.

The engineering, procurement and construction services provider posted revenue of $1.74 billion in the period, which also did not meet Street forecasts. Five analysts surveyed by Zacks expected $1.81 billion.

For the current quarter ending in December, Chicago Bridge & Iron said it expects revenue in the range of $1.8 billion to $2 billion.

Chicago Bridge & Iron shares have fallen 49 percent since the beginning of the year. In the final minutes of trading on Monday, shares hit $16.18, a drop of 49 percent in the last 12 months.

=Chicago Bridge & Iron (CBI) reported earnings on Wed 9 Aug 2017 (a/h)

CB&I reports Q2 (Jun) results, suspends dividend, pursuing a sale of its Technology business, initiates comprehensive cost reduction program(16.33 -0.09)

• Reports Q2 (Jun) GAAP loss of $(3.02) per share from cont ops. Appears to not be comparable to the Capital IQ Consensus of $0.91; revenues fell 40.6% year/year to $1.28 bln, this also appears to not be comparable to the $2.49 bln Capital IQ Consensus. See below for explanation as to why the results appear to not be comparable to consensus.
  • Note: Results are for continuing operations, which consist of CB&I's Engineering & Construction (E&C), Fabrication Services and Technology businesses. The results of its former Capital Services business have been classified as a discontinued operation for all periods presented. CB&I also announced in a separate news release today that it is initiating the process to sell its Technology business. 
• "Although our [Q2] results are disappointing, we are taking decisive actions to improve our operating performance and strengthen the company's financial position...We have initiated a comprehensive cost reduction program and suspended our dividend. We are injecting additional rigor and discipline into our execution and risk management processes, further strengthening the integration between our E&C and Fabrication Services operating groups, and accelerating the implementation of innovative practices and technologies."
• Co also announces it is pursuing a sale of its Technology business, which the co believes will unlock significant value for stakeholders. Co plans to use the proceeds from the sale to significantly enhance CB&I's financial strength and flexibility by eliminating the majority of its debt and reinvesting in its E&C and Fabrication Services businesses.
• Co envisions a bright future for CB&I as a highly focused company with tightly integrated EPC and fabrication capabilities serving the LNG, petrochemical, refining and gas power generation markets.
• Guidance: Co expects 2H17 revenue to be between $3.7 and $4.0 billion and EPS of $1.00 to $1.25.

Long trade : CBI +50% (6/17)

• 6/26: #97
• vol:  4.3 M

  

CBI — is it a buy?

• 2/13/17:  is CBI a buy?

• 4 days later

• A month later:

Chicago Bridge & Iron (CBI) reported earnings on Thur 27 Oct 2016 (a/h)

• #97 before earnings

** charts after earnings **

   

Chicago Bridge & Iron Company N.V. CBI reported third-quarter 2016 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate of $1.17 by 2.6%. It had reported a loss of $7.02 per share in the year-ago quarter.

Adjusted earnings (excluding divested businesses) for the quarter came in at $1.28 per diluted share.

Inside the Headlines

The company reported third-quarter 2016 revenues of $2,776 million, marginally beating the Zacks Consensus Estimate of $2,771 million. However, revenues fell 16.4% year over year.

The lackluster top-line performance during the quarter was largely a result of revenue declines across all of the company’s segments. Also, absence of revenues from the previously divested nuclear operations compounded the fall.

Gross profit decreased 13.5% year over year to $326.6 million, while gross margin contracted 40 basis points to 11.8%.

The company booked new awards worth $2,716 million during third-quarter 2016, compared with $4 billion in the prior-year quarter. The decline in new award wins was largely attributable to cautionary spending on part of the large clients who continue to defer investments due to softness in energy markets.

Long trade : CBI +15% (7/16)

• 6 weeks later

Long trade : CBI +15% (2/16)

Chicago Bridge & Iron Company N.V. (NYSE:CBI)

Shares of Chicago Bridge & Iron Company N.V. (NYSE:CBI) have rallied by 15.4% in morning trading after the company announced that it will sell its nuclear construction business to Westinghouse Electric for $229 million in cash.

CB&I anticipates incurring a non-cash after tax charge of $1.0 billion-to-$1.2 billion due to the impairment of goodwill among other factors. In conjunction with the news of the deal, CB&I also released its preliminary third quarter results, in which the company expects to realize revenues of $3.3 billion and adjusted net income per share of $1.54 per share. Hedge funds are bullish on CB&I. 26 funds of the 730 or so elite funds we track reported stakes worth $1.11 billion in the company, accounting for 20.40% of the float, at the end of June, down slightly from 28 funds with $1.24 billion in shares at the end of March. Warren Buffett‘s Berkshire Hathaway owned 9.33 million shares of Chicago Bridge & Iron Company N.V. (NYSE:CBI) at the end of June.

Long trade : CBI +15% (5/15)