Jacobs completes CH2M acquisition

MOSCOW (MRC) -- Jacobs Engineering Group Inc. announced the completion of its acquisition of CH2M via a cash and stock transaction, as per Hydrocarbonprocessing.

The combination, which received broad affirmative support from CH2M shareholders, is expected to further drive the company’s profitable growth strategy. Jacobs formed an Integration Management Office (IMO) early in August to begin integration planning following the announcement of the proposed CH2M acquisition. The IMO identified rigorous processes and protocols to drive realization of cost and growth synergies, for which Jacobs’ executive team and Board of Directors will continue to provide active oversight.

Both organizations reported strong performance in 2017, bolstering confidence in prospects for enhanced value creation in the newly combined firm and reinforcing the expectations for integration synergies and returns on the transaction.

Reaffirms fiscal 2018 outlook. The company reaffirms its previous fiscal 2018 outlook for both Jacobs as a stand-alone business and the expected contribution from CH2M, which translates to fiscal 2018 adjusted EPS of USD3.55 to USD3.95.2 This guidance includes a negative impact from the amortization from CH2M purchase intangibles. The outlook also incorporates standalone revenue growth ramping during the fiscal year in-line with the company’s previous expectations. Given the timing of the close, the company does not expect any material benefit from CH2M in its Q1 results.

Significant cost savings. Jacobs expects to achieve an estimated USD150 MM of annual run-rate savings by the end of the second year after closing, primarily from real estate, optimized organizational alignment and systems integrations. Jacobs expects to incur approximately USD225 MM in one-time costs to achieve these ongoing savings. In addition, the company expects to incur other one-time costs associated with the acquisition, such as change in control payments, banking and legal fees.

Earnings accretion. The transaction is expected to be 15% accretive to Jacobs’ adjusted earnings per share in the first full year after closing 2% and 25% accretive when further excluding the impact of amortization from CH2M purchase intangibles. Upside for profitable growth. The broader, combined solutions offering of the combined company, including CH2M’s proven leadership in program management and construction management, presents potential for longer-term revenue upside extending both companies’ complementary offerings across their combined client base and broader global footprint.

Attractive risk profile. Jacobs expects that after closing, approximately 85% of combined revenues will ?be derived from lower-risk and reimbursable contracts.
MRC

MOSCOW (MRC) — McDermott International, Inc. and CB&I announced that the companies have agreed to combine in an all-stock transaction to create a premier fully vertically integrated onshore-offshore company, with a broad engineering, procurement, construction and installation (EPCI) service offering and market leading technology portfolio, said Hydrocarbonprocessing.

Upon completion of the transaction, McDermott shareholders will own approximately 53% of the combined company on a fully diluted basis and CB&I shareholders will own approximately 47%.

Under the terms of the business combination agreement (BCA), CB&I shareholders will be entitled to receive 2.47221 shares of McDermott common stock for each share of CB&I common stock owned (or 0.82407 shares if McDermott effects a planned three-to-one reverse stock split prior to closing), subject to any withholding taxes. The estimated enterprise value of the transaction is approximately USD6 B, based on the closing share price of McDermott on Dec. 15.
MRC

MOSCOW (MRC) -- BASF and Sinopec will expand the production capacity of Neopentylglycol (NPG) at the state-of-the-art Verbund site, BASF-YPC Co., Ltd., a 50-50 joint venture in Nanjing, China, as per Hydrocarbonprocessing.

The plant was established in 2015 with an annual capacity of 40,000 metric tons. Following the expansion, the annual capacity will be doubled to 80,000 metric tons. The expanded capacity will come on stream in 2020.

NPG is a unique polyalcohol offering superior performance in many end-use applications such as powder coatings, textiles and construction due to its high chemical and thermal stability. It is mainly used as a building block in polyester resins for coatings, unsaturated polyester and alkyd resins, lubricants and plasticizers. As the global market leader, BASF has NPG production facilities in Ludwigshafen, Germany; Freeport, Texas, United States and Jilin, China.

As MRC informed previously, within the next five years, BASF SE (Ludwigshafen, Germany) plans to invest globally more than EUR200 million in its plastic additives business, approximately half of which in Asia, focusing on capacity expansions and operational excellence. Plastic additives improve product properties such as scratch resistance or light stability, and optimize plastics manufacturing processes. As the leading global supplier of plastic additives with manufacturing assets in all regions, BASF is a major partner to the plastics industry.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Azerbaijan’s state oil company SOCAR has signed an EPC (Engineering, Procurement and Construction) contract with Spanish engineering company Tecnicas Reunidas for reconstruction of units at the Heydar Aliyev Baku Oil Refinery as part of its modernization, said a message posted on SOCAR website Dec. 19, as per Trend.

The refinery is being modernized in order to produce high-quality fuel. The modernization will continue until 2021. "SOCAR-KBR LLC, a contractor for management of the modernization project, has selected the Spanish company Tecnicas Reunidas as a winner of a tender on an EPC contract for reconstruction of units and general production facilities," the message said.

The signing ceremony was attended by SOCAR President Rovnag Abdullayev, Vice President for Strategic Development Tofig Gahramanov, Vice President for Refining David Mammadov, Vice President for Economic Issues Suleyman Gasimov, Director General of the Heydar Aliyev Baku Oil Refinery Elman Ismayilov, First Executive Vice Chairman of the Board and CEO at Tecnicas Reunidas Juan Llado Arburua, Tecnicas Reunidas Director General for Corporate Development Enrique Ruben Alsina Massana and others.

The contract was signed by Director General of the Heydar Aliyev Baku Oil Refinery Elman Ismayilov and Director General for Corporate Development at Tecnicas Reunidas Enrique Ruben Alsina Massana.

Ten international companies participated in the tender for selection of an EPC contractor for reconstruction of units at the refinery.

The cost of modernization of the refinery is estimated at about USD1.5-1.7 billion. The exact cost will be known once all EPC contracts are awarded.

After modernization, the production capacity of the refinery will increase from 6 million to 7.5 million tons per year, and its operational period will increase to 2040.
MRC

MOSCOW (MRC) -- Overall output of chemicals grew in the first eleven months of 2017 by 4.9% year on year, with mineral fertilizers accounting for the greatest increase in production, according to Rosstat.

According to the Federal Service of State Statistics, last month's production of basic chemicals rose by 3% from October. Thus, output of basic chemicals went up by 4.9% year on year in January-November 2017, with chemical fertilizers accounting for the greatest increase in production and ethylene - for the least growth.

November output of ethylene was 250,000 tonnes, compared to 205,000 tonnes a month earlier, last month's low production was caused by a scheduled shutdown for maintenance at Stavrolen. Overall, over 2.6 mln tonnes of this olefin were produced in the first eleven months of 2017, up by 2.3% year on year.

Last month's production of benzene rose to 117,000 tonnes from 114,000 tonnes in October. Overall output of this product exceeded 1.24 mln tonnes over the stated period, up by 4.8%year on year.

November production of sodium hydroxide (caustic soda) were 106,000 tonnes (100% of the basic substance) versus 109,000 tonnes a month earlier. The decrease in the volume of output last month was seen at Kaustik (Volgograd). Overall output of caustic soda grew to 1.12 tonnes in the first eleven months of 2017, up by 6.9% year on year.

Last month's production of mineral fertilizers was 1.82 mln tonnes (in terms of 100% nutrients) versus 1.88 mln tonnes in October. However, Russian plants produced 20.06 mln tonnes of fertilizers in January-November 2017, up by 8.3% year on year.

Production of all types of fertilizers increased, with potash fertilizers, the output of which grew by 11.8%, accounted for the greatest increase.
MRC