Chicago Bridge & Iron Company N.V. (NYSE:CBI) has announced its plans to sell its technology business and it plans to have completed unloading the unit by the end of 2017.
The announcement of the sale of the technology business also comes after the company’s recent reveal of its quarterly earnings report. The latter revealed that CB&I’s revenue for the latest quarter dropped by 40 percent compared to the revenue numbers for the second quarter of 2016. The company also announced that it will be suspending investor payouts in an effort to stabilize the bottom-line. The sale of the technology unit is also likely to be a move aimed at getting the firm back on its feet.
“Supported by more than 100 years of technology development, our Technology business is unique. With 3,000 patents and patent application trademarks and more than 100 licensed technologies, we are one of the largest providers of licensed process technologies in the world,” stated Patrick K. Mullen, the president and CEO of CB&I.
Mullen further pointed out that the technology business has consistently offered impressive margins and is also characterized by low capital requirements. The CEO also revealed that the company’s intention is to negotiate a long-term and strategic partnership with the firm that will purchase the technology business so that both of them can benefit.
Mullen also noted that the technology business, as well as its employees, have played a key role in CB&I and it is expected to remain as such until the sale is complete. Despite his positive sentiments about the business, the CEO also pointed out that it is undervalued as part of the company, thus the conclusion that a sale would generate maximum value for its investors.
Mullen also stated that the proceeds from the sale will be used to boost the company’s financial position as well as its flexibility by paying off part of its debt. CB&I also plans to reinvest some of the proceeds towards its Fabrication Services, engineering and construction businesses.
CB&I stock closed the latest trading session on Wednesday at $16.33 after a 0.55 percent decline compared to the value of the stock during the previous close.