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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Halliburton Co | NYSE:HAL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.03 | 0.08% | 36.73 | 36.89 | 36.238 | 36.74 | 3,911,903 | 01:00:00 |
Engineering and construction firm KBR Inc. said it agreed to buy Honeywell's government services provider, expanding its portfolio to include aerospace logistics and services for intelligence clients as part of its yearslong strategy to focus on its government services business.
KBR on Friday said it would pay roughly $300 million for the Honeywell unit, known as Honeywell Technology Solutions Inc. KBR put the final transaction price at $266 million, after adjusting for about $34 million of acquired tax benefits.
Chief Executive Stuart Bradie said the deal, which is expected to offer more opportunities for higher-margin government services work, would lower the company's risk profile as revenue in its engineering and construction business has tumbled.
KBR, formerly a part of Halliburton Co., was one of the key U.S. contractors in Iraq following the 2003 invasion, providing logistical support for American forces, among other tasks. The Houston-based energy-construction and government-contracting company has been working to reshape its operations on the more lucrative government services business amid declines in certain contracts and the effect of lower energy prices on many firms' capital spending budgets.
The Honeywell unit is based in Columbia, Md., and has about 3,550 employees in the U.S., Middle East and Asia. Its customers include NASA, the U.S. Department of Defense and U.S. intelligence agencies.
The transaction, subject to regulatory approval, is expected to close by the end of October. The Honeywell unit will be integrated into KBRwyle, KBR's government services subsidiary. KBR said the move would add to earnings and positive cash flow in 2017. Separately, Honeywell said the sale didn't impact its financial guidance.
Shares of both Honeywell and KBR were inactive premarket. KBR stock has risen 12% over the past month but is still down 16% from a year ago.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 12, 2016 09:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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