McDermott International Inc. (NYSE: MDR) on Monday said it plans to separate its operating subsidiaries into two independent publicly traded companies, according to Associated Press.
The move better positions Babcock & Wilcox Co. and J. Ray McDermott SA to accelerate growth based on distinct corporate strategies, market opportunities, free cash flow and customer relationships, McDermott International said a statement.
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After the company spins off power generation systems maker B&W, McDermott International, which provides engineering and construction services for utilities and oil and gas producers, will take the name of its J. Ray McDermott SA subsidiary, continuing to provide services to the upstream oil and gas market. Shareholders will own 100 percent of the two separate companies.
Brandon Bethards will continue to serve as B&W's CEO and will join its board when the transaction is complete. Fees will also join the board and focus on establishing B&W as a publicly traded company on the New York Stock Exchange.
Stephen Johnson will assume the role of CEO of J. Ray McDermott at the end of the year, following the retirement of the unit's current head Robert Deason. Johnson currently serves as chief operating officer of McDermott International. When the separation is completed, Johnson will join the board of J. Ray McDermott.
J. Ray McDermott will retain McDermott International's "MDR" listing on the New York Stock Exchange.
The tax-free transaction is expected to close in nine to 12 months.
Shares of McDermott International added $2.27, or 11 percent, to $22.93 in afternoon trading. The stock has ranged from $9.10 to $27.89 over the past year.
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