HOUSTON, Texas — July 5, 2016 — KBR, Inc. (NYSE: KBR) announced today it has completed the acquisition of Wyle, Inc. for $570 million, after adjustments for approximately $30 million of acquired tax benefits, and subject to other customary adjustments, including for net working capital, net cash and indebtedness of Wyle.
Wyle will now operate under the new company brand "KBRwyle" that preserves the Wyle name and logo, acknowledges the value of KBR's new ownership and honors the legacies of both companies. The combined brand "KBRwyle" maintains continuity for Wyle's existing clients and highlights to KBR's clients and the market that together with Wyle's technical capabilities, KBR's Government Services capabilities and service offerings now span the full spectrum of government mission requirements including research and development, testing, engineering, logistics, deployed operations, and life-cycle sustainment.
"Today we are proud to welcome Wyle to KBR," said Stuart Bradie, President and CEO of KBR, Inc. "KBRwyle fits perfectly with our strategy to expand KBR's global Government Services offerings, moving the business towards the high growth, more specialized, technology- and science-driven sources of long-term annuity type revenues with greater differentiation and higher margins. As our Government Services markets expand we are seeing increasing synergy with our hydrocarbons business, with people and services moving between divisions, further enhancing the value proposition of the acquisition," said Bradie.
"KBR and Wyle share a proud legacy of innovation and performance for which all of our now combined 25,800 employees can be proud. It is with great pleasure that we unite these two companies to create the equivalent of a global $2 billion Government Services organization with full service capabilities drawing on the best in class capabilities of both organizations," continued Bradie.
The acquisition is expected to be accretive to KBR's earnings per share in the first year, providing synergistic opportunities in government services markets where KBR's large-scale logistics and project management capabilities combine with Wyle's specialized technical capabilities.
KBRwyle will become a KBR business unit within KBR's Government Services business segment and will maintain much of its current structure to ensure business continuity. Moreover, Wyle has a strong and experienced management team which will continue in their current capacities. Together, KBR and KBRwyle will focus on capitalizing on new opportunities for the combined company.
As of year-end 2015, Wyle's funded backlog was $440 million with an additional $1.1 billion of orders not yet funded, but expected.
The transaction was funded by utilizing KBR's existing line of credit facility and approximately $200 million in cash.
About KBR, Inc.
KBR, Inc. is a global technology, engineering, procurement and construction company serving the hydrocarbons and government services industries, employing approximately 22,000 people worldwide with customers in more than 80 countries and operations in 40 countries across three distinct global businesses:
- Technology & Consulting, including proprietary technology in refining, ethylene, ammonia and fertilizers, and gasification; and niche consulting and know-how through subsidiaries Granherne, Energo and GVA
- Engineering & Construction, including Offshore Oil & Gas; Onshore Oil & Gas; LNG/GTL; Refining; Petrochemicals; Chemicals; differentiated EPC, and Industrial Services
- Government Services, including program management and long term annuity contracts
KBR is proud to work with its customers across the globe to provide technology, value-added consulting services, integrated EPC delivery and Long Term Industrial Services to ensure consistent project delivery with predictable results. At KBR, we deliver.
Forward Looking Statement
The statements in this press release that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: the outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; potential adverse proceedings by such agencies and potential adverse results and consequences from such proceedings; the scope and enforceability of the company's indemnities from its former parent; changes in capital spending by the company's customers; the company's ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company's ability to control its cost under its contracts; claims negotiations and contract disputes with the company's customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements; compliance with laws related to income taxes; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; increased competition for employees; the ability to successfully complete and integrate acquisitions; and operations of joint ventures, including joint ventures that are not controlled by the company.
KBR's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other Securities and Exchange Commission filings discuss some of the important risk factors that KBR has identified that may affect the business, results of operations and financial condition. Except as required by law, KBR undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
For further information, please contact:
Vice President, Investor Relations
Marit Babin Stout
Director, Global Communications & Government Relations