Investment group Brookfield Business Partners L.P. said Thursday it had entered into an agreement to purchase 100 percent of Westinghouse Electric Company, the U.S. nuclear power designer and builder that has been owned by Toshiba Corp. since March 2006. Brookfield said Westinghouse, purchased by Westinghouse for $5.6 billion, is a leading provider of infrastructure services to the power generation industry, noting its strong global reputation, its diversity and its "attractive revenue and cash flow profile." Westinghouse has been in bankruptcy since March 2017. The company has been frequently assailed as a significant contributing factor in Toshiba's recent years in the red, which fell in line with a global slowdown in nuclear power construction attributed to fears raised by the March 2011 accident at the Fukushima Daiichi Nuclear Generating Station in Japan.
"The transaction provides for a purchase price of approximately $4.6 billion, expected to be funded with approximately $1 billion of equity, approximately $3 billion of long-term debt financing and the balance by the assumption of certain pension, environmental and other operating obligations," Brookfield said in a statement.
“Westinghouse is a high-quality business that has established itself as a leader in its field, with a long-term customer base and a reputation for innovation,” said Brookfield Business Partners Chief Executive Officer Cyrus Madon. "We look forward to bringing our significant expertise and reputation as a long-term owner and operator of critical infrastructure in the U.S. and globally, as well as our deep facilities management capabilities, to enhance the Company’s position as a leading global infrastructure services provider to the power generation industry.”
Brookfield cited the company's "strong market position ... (as) the largest service provider to the world’s nuclear power facilities." Besides its diverse customer base, Westinghouse "has a well-established installed base of long-term customers," the investors noted, a nod to the point that constructing a nuclear power plant generally leads to long-term servicing contracts.
Brookfield also noted Westinghouse's "focus on innovation." The "iconic American company ... offers a full suite of specialized parts and components, many of which are licensed or patented, as well as industry-leading engineering and other services that enhance the safety, efficiency and reliability of its customers’ facilities."
Brookfield’s acquisition of Westinghouse is expected to close in the third quarter of 2018, subject to Bankruptcy Court approval and customary closing conditions including, among others, regulatory approvals. Throughout the process, Westinghouse will continue to operate in the ordinary course of business under its existing senior management.
PJT Partners is the financial advisor to Westinghouse, Weil, Gotshal & Manges LLP is Westinghouse’s legal counsel, and AlixPartners LLP is Westinghouse’s turnaround consultant.
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