Shaw Group wins bidding for Stone & Webster

Piping systems supplier Shaw Group Inc., Baton Rouge, La., on Friday said it has won the bidding for the assets of Boston engineering firm Stone & Webster Inc., which was being reorganized under Chapter 11 of the US Bankruptcy Code. Shaw cut out another suitor, Jacobs Engineering Group Inc., to make the purchase.


Piping systems supplier Shaw Group Inc., Baton Rouge, La., on Friday said it has won its bid for the assets of Boston engineering firm Stone & Webster Inc., which was being reorganized under Chapter 11 of the US Bankruptcy Code. Shaw cut out another suitor, Jacobs Engineering Group Inc., to make the purchase.

Subject to bankruptcy court approval, Shaw will acquire substantially all of the assets and assume certain liabilities of Stone & Webster for a total purchase price of about $38 million in cash and approximately 2.5 million shares of Shaw common stock.

Shaw values its offer at $163 million. The firm says it also will assume liabilities with a book value of about $450 million and acquire assets with a book value of $600 million.

Stone & Webster had signed a letter of intent with Jacobs Engineering Group Inc., Pasadena, Calif., for Jacobs to acquire S&W's assets and contracts for $150 million in cash and stock and assumption of liabilities (OGJ Online, May 10, 2000). Jacobs also agreed to advance up to $50 million in working capital funds to S&W under a secured revolving credit agreement.

At that time, S&W announced it would file petition for reorganization under Chapter 11. In early June, it and Jacobs were expecting the deal to move forward as planned.

The Shaw Group said earlier this week that its qualified bid of $163 million enabled it to enter the bidding process.

Shaw says it hopes to use S&W's experience in the worldwide power market to dominate the global power industry. The Shaw and S&W businesses had combined revenues of about $1.7 billion in 1999 and will move forward with a total backlog of work exceeding $2.0 billion.

Pending approval by the court, Shaw anticipates closing the transaction as early as this week.

Shaw Chairman J.M. Bernhard Jr. said, "We plan to move quickly in closing the transaction, and upon doing so, will focus on integrating core capabilities and divesting non-core assets."

Shaw will continue to be headquartered in Baton Rouge.

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