Babcock sells engineering enterprise to KBR for £293m : CityAM
Defense giant Babcock announced today that it will sell engineering subsidiary Frazer-Nash Consultancy to other infrastructure provider KBR for £ 293 million.
The sale marks the first step in a plan to scrap £ 400 million contracts over the next 12 months to repair the FTSE 100 company’s battered balance sheet.
The shares of the London company rose 6.2 percent in the first hour of trading.
Frazer-Nash, part of Babcock’s maritime division, employs approximately 900 people and had sales of £ 100 million last year.
It provides engineering solutions for a portfolio of 13 locations in the UK and Australia.
Last month, Babcock announced it was streamlining its business to focus solely on being an international aerospace, defense and security company.
It came after a year in which the company posted a loss of £ 1.6 billion on canceled contracts worth £ 2 billion.
CEO David Lockwood said, “We are making real progress on our plan to streamline the group and focus on our key markets.
“Selling at least £ 400 million to companies as part of our targeted divestment program will allow us to reduce complexity and increase our focus while re-empowering Babcock. Frazer-Nash Consultancy is a good fit for KBR and I wish you every success as the company continues to grow. “
Babcock is one of the largest suppliers to the Ministry of Defense (MoD) and a key partner in the construction of new ships for the Navy’s fleet.
As part of the turnaround, the company plans to sell its oil and gas aviation business, which transports workers to oil rigs, and is reviewing portions of its air emergency business, which provides search and rescue, fire fighting and medical services.
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