Brookfield Business Partners L.P. (NYSE:BBU)
(TSX:BBU.UN) ("Brookfield Business Partners"), together with its
institutional partners (collectively “Brookfield”), and Clayton,
Dubilier & Rice (“CD&R”) today announced a definitive
agreement for Brookfield to acquire half of CD&R’s ownership
interest in Brand Industrial Services (“BrandSafway” or “Company”).
As a result of the investment, Brookfield and funds managed by
CD&R will each own approximately 45% of the Company.
BrandSafway management will continue to own a minority interest in
the business.
BrandSafway is a leading provider of
infrastructure services to industrial and commercial facilities on
a global basis. The Company delivers scaffolding and other work
access solutions, forming and shoring equipment, and numerous
specialty industrial services to more than 30,000 customers in more
than 30 countries worldwide. Its solutions support a wide range of
global infrastructure ranging from refineries and petrochemical
plants, to commercial buildings, bridges, hydroelectric dams, and
other power facilities.
“BrandSafway has established itself as a
high-quality, highly cash generative infrastructure services
business benefiting from significant competitive advantages,
including a leading market position, customer-centric culture, and
a reputation for safety and innovation,” says Cyrus Madon, CEO,
Brookfield Business Partners. “Brookfield has a long history
partnering with BrandSafway across our various operating platforms.
We are very excited about the opportunity to work with Company
leadership and our partners at CD&R to continue growing the
business.”
“BrandSafway has undergone a true transformation
since our initial investment in 2013, growing from $3 billion in
revenue focused primarily on industrial end-markets in North
America to a leading global provider of specialty services for a
wide range of infrastructure with more than $5 billion in revenue,”
said Nate Sleeper, CD&R Partner. “We are excited to partner
with Brookfield, who brings significant value to the Company
through its extensive portfolio of infrastructure and real estate
assets. BrandSafway has significant runway for growth, both
organically and inorganically, and we look forward to supporting
management in continuing to execute on their strategic vision for
the business.”
“Our entire leadership team is excited about the
opportunity to work with CD&R and Brookfield to continue to
drive value creation over time,” said Bill Hayes, President and CEO
of BrandSafway. “CD&R has been critical to our success in
creating the leading access and industrial services player – and
now Brookfield brings additional resources, expertise, and insights
to continue our global growth. Brookfield knows the customers,
regions, and end markets we serve – this partnership will be
compelling for both our employees and customers.”
Investment Highlights:
- Leading market
position. BrandSafway is the market leader in North
America and has the broadest service offering in the industry.
- Clear competitive
differentiation. The Company has earned a reputation as a
leader in safety, innovation, productivity and engineering and
continually invests to further enhance the value of its service
offering to customers.
- Diversified business
model. BrandSafway has a resilient business model as a
result of its highly-diversified end markets, geographic exposure
and customer base.
- Stable end market
demand. There is significant, highly-recurring demand for
its services, with the vast majority of revenues derived from
serving the ongoing maintenance requirements of its global customer
base. Stable customer demand combined with BrandSafway’s high
return on capital allows the business to generate consistent free
cash flow through economic cycles.
- Opportunities for growth
and margin expansion. BrandSafway is well-positioned to
capitalize on operational improvement opportunities and strategic
growth initiatives.
Funding
Brookfield’s investment will be funded with
approximately $1.3 billion of equity. Brookfield Business
Partners intends to fund approximately $400 million, with the
balance being funded by institutional partners. Prior to or
following closing, a portion of Brookfield Business
Partners' commitment may be syndicated to other institutional
investors.
Transaction Process The
transaction is subject to customary approvals and is anticipated to
occur in the first quarter of 2020.
Advisors
Debevoise & Plimpton LLP is acting as legal
advisor to CD&R in the transaction.
Brookfield Business Partners is
a business services and industrials company focused on owning and
operating high-quality businesses that benefit from barriers to
entry and/or low production costs. Brookfield Business Partners is
listed on the New York and Toronto stock exchanges. Important
information may be disseminated exclusively via the website;
investors should consult the site to access this information.
Brookfield Business Partners is the flagship
listed business services and industrials company of Brookfield
Asset Management Inc. (NYSE: BAM)(TSX: BAM.A), a leading global
alternative asset manager with more than $385 billion of
assets under management. For more information, please visit our
website at https://bbu.brookfield.com.
Clayton, Dubilier & Rice is
a private investment firm with a strategy predicated on producing
financial returns by building stronger, more profitable businesses.
Since inception, CD&R has managed the investment of $28 billion
in 86 businesses representing a broad range of industries with an
aggregate transaction value of more than $130 billion. The Firm has
offices in New York and London. For more information, please visit
www.cdr-inc.com.
With a commitment to safety as its foremost
value, BrandSafway provides the broadest range of
solutions with the greatest depth of expertise to the industrial,
commercial and infrastructure markets. Through a network of 330
strategic locations across 30 countries and more than 38,000
employees, BrandSafway delivers a full range of forming, shoring,
scaffolding, work access and industrial service solutions.
BrandSafway supports maintenance and refurbishment projects as well
as new construction and expansion plans with unmatched service from
expert local labor and management. Today’s BrandSafway is At Work
For You™ — leveraging innovation and economies of scale to increase
safety and productivity, while remaining nimble and responsive.
For more information about BrandSafway, visit
www.brandsafway.com.
For Brookfield: |
|
Media Claire Holland Brookfield Business Partners
Tel: +1 416 369 8236 Email: claire.holland@brookfield.com For
CD&R: Dan Jacobs Clayton Dubilier & Rice Tel: +1 212 407
5218 Email: djacobs@cdr-inc.com |
Investor Relations Alan Fleming Brookfield
Business Partners Tel: +1 416 645 2736 Email:
alan.fleming@brookfield.com |
For BrandSafway: Karla
CuculiBrandSafway262-538-0180kcuculi@brandsafway.com |
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS AND INFORMATION
Note: This news release contains
"forward-looking information" within the meaning of Canadian
provincial securities laws and "forward-looking statements" within
the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act of 1934,
as amended, "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. The words “will,” “may,”
"anticipated," "intends," derivatives thereof and other expressions
which are predictions of or indicate future events, trends or
prospects and which do not relate to historical matters will tend
to identify forward-looking statements. Forward-looking statements
in this news release include statements regarding the expected
completion of the transaction described herein and the anticipated
timing thereof, the future performance, operation and cash flows of
BrandSafway and Brookfield Business Partners’ intentions to fund
the transaction.
Although we believe that the forward-looking
statements we make are based upon reasonable assumptions and
expectations, the reader should not place undue reliance on them or
any other forward-looking statements or information in this news
release. The future performance and prospects of Brookfield
Business Partners are subject to a number of known and unknown
risks, uncertainties and other factors, many of which are beyond
our control. Factors that could cause actual results to differ
materially from those contemplated or implied by forward-looking
statements in this news release include, but are not limited to:
the impact or unanticipated impact of general economic, political
and market factors in the countries in which we do business; the
behavior of financial markets, including fluctuations in interest
and foreign exchange rates; global equity and capital markets and
the availability of equity and debt financing and refinancing
within these markets; strategic actions including dispositions; the
ability to complete and effectively integrate acquisitions into
existing operations and the ability to attain expected benefits and
in particular completion of the acquisition referred to in this
news release, which cannot be assured; changes in accounting
policies and methods used to report financial condition (including
uncertainties associated with critical accounting assumptions and
estimates); the ability to appropriately manage human capital; the
effect of applying future accounting changes; business competition;
operational and reputational risks; technological change; changes
in government regulation and legislation within the countries in
which we operate; governmental investigations; litigation; changes
in tax laws; ability to collect amounts owed; catastrophic events,
such as earthquakes and hurricanes; the possible impact of
international conflicts and other developments including terrorist
acts and cyber terrorism; and other risks and factors detailed from
time to time in our documents filed with the securities regulators
in Canada and the United States.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. When
relying on our forward-looking statements, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. Except as required by law,
Brookfield Business Partners undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether written or oral, that may be as a result of new
information, future events or otherwise.
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