Stone & Webster bankruptcy, acquisition move forward
Stone & Webster Inc. last week filed a voluntary petition for reorganization under US bankruptcy law and a definitive sales agreement with Jacobs Engineering Group Inc. The two moves are part of a deal between Jacobs and Stone & Webster, announced last month (OGJ Online, May 10, 2000).
Stone & Webster Inc. last week filed a voluntary petition for reorganization under US bankruptcy law and a definitive sales agreement with Jacobs Engineering Group Inc. The two moves are part of a deal between the two engineering firms, announced last month (OGJ Online, May 10, 2000).
Under terms of the transaction, Jacobs will acquire substantially all of Stone & Webster's assets in exchange for $150 million in cash and stock and the assumption of substantially all of Stone & Webster's liabilities as of Mar. 31, 2000, standby letters of credit, and its liabilities under a new credit facility with Jacobs, entered into on May 9. Jacobs is also making up to $50 million of credit available to Stone & Webster so that the firm can continue to operate until the asset sale is completed.
In conjunction with and as a condition to the proposed acquisition, Stone & Webster will be seeking bankruptcy court approval of the asset sale and credit agreement.
Stone & Webster said it "fully expects to continue operating its businesses in the normal course during the reorganization process," adding, "The company's operations have remained functional, and its employees are expected to transition smoothly into the Jacobs organization."
H. Kerner Smith, Chairman, President, and CEO of Stone & Webster, said, "We continue to believe that this transaction, as well as the...voluntary court filing, are in the best interest of all of Stone & Webster's constituencies, including its employees, shareholders, clients, suppliers, and lenders. We hope to move forward with the reorganization as quickly as possible."
The proposed transaction is subject to approval under the Hart-Scott-Rodino Act, confirmation of Stone & Webster's reorganization plan by the US Bankruptcy Court, and completion of due diligence by Jacobs, among other conditions.
Stone & Webster said, "Because the proposed sale of assets will occur in the context of a pending Chapter 11 case, it is not possible to determine at the present time what value, if any, will ultimately be received by Stone & Webster's stockholders. Such a determination can only be made after the completion of the competitive bid process provided for under Chapter 11, consummation of the asset sale transaction, and the substantial resolution of Stone & Webster's Chapter 11 case."