Construction services company Shaw Group Inc. (SHAW) Monday agreed to sell most of its Energy & Chemicals business to France-based Technip for about $300 million in cash, subject to certain adjustments. Shaw anticipates to close the divestiture in the fourth quarter 2012.
Shaw, considering certain gains and charges, also raised its outlook for fiscal year 2012.
As part of the terms, Baton Rouge, Louisiana-based Shaw and Technip have also agreed to work toward developing future business involving Shaw's core units.
Shaw said it will retain Energy & Chemicals Group personnel in its Baton Rouge office, which will be clubbed into Shaw's Plant Services Division, as well as Shaw Consulting International Inc. Shaw also will retain its Toronto-based operations.
Shaw will further maintain its obligations under an engineering, procurement and construction contract associated with an ethylene plant in southeast Asia that is now about 98 percent complete.
Shaw said it expects to recognize a net pre-tax gain of about $15 million related to the disposition of operations included in the transaction. The gain includes charges of about $75 million pre-tax.
On a pre-tax basis, Shaw currently estimates this process will result in a charge of $43 million in the third quarter 2012, a gain of $66 million in the fourth quarter 2012, and a charge of $8 million in fiscal year 2013.
Shaw said the timing and final amounts of the gain and charges are dependent upon the closing of the transaction, among other things.
Shaw now expects fiscal year 2012 earnings of $2.20 to $2.30 per share, while analysts currently estimate $2.12 per share. Shaw in March had estimated 2012 earnings, excluding Westinghouse segment, of $2.05 to $2.15 per share.
SHAW closed Monday on the NYSE at $27.57, up $0.11 or 0.40%.
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