The oilfield services provider is said to have received unsolicited approaches for Lummus Technology with a valuation of over £2bn
McDermott International revealed that it has received bids from undisclosed parties for the acquisition of 100% or part of its Lummus Technology business, valuing it at more than $2.5bn (£2bn).
The company said that based on the ‘unsolicited’ bids, it is pursuing strategic alternatives for the technology business, which is engaged in the energy downstream sector.
Lummus Technology is a licensor of proprietary petrochemicals, refining, gasification and gas processing technologies, apart from supplying proprietary catalysts and related engineering services.
The technologies, which are supplied by the McDermott business, are important in the refining of crude oil into gasoline, diesel, jet fuel and lubricants, gasification of coal into syngas, and for processing natural gas into different chemicals and polymers.
Lummus Technology is said to license over 100 different technologies with core strength in the areas of olefins like ethylene, butylene, propylene, refining hydroprocessing, and production of derivatives.
Chicago Bridge & Iron Company (CB&I) was the previous owner of the technology business, which was renamed as Lummus Technology following the former’s acquisition by McDermott for $6bn (£4.81bn) in 2018.
Sale of Lummus Technology expected to consolidate McDermott’s balance sheet
McDermott president and CEO David Dickson said: “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.”
“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.”
The oilfield services provider said that its previously announced processes to divest the remaining portion of its pipe fabrication business and its industrial storage tank business are in progress. In July 2019, McDermott wrapped up the sale of Alloy Piping Products (APP), which was formerly the distribution and manufacturing unit of its US pipe fabrication business.