BWC Wins Swedish Contract - Analyst Blog

Babcock & Wilcox Volund A/S (B&W Volund), a subsidiary of The Babcock & Wilcox Company (BWC) announced that it has won a contract worth more than $30 million from Sweden based Lidkoping Varmeverk AB.

Per the terms of the agreement, Babcock & Wilcox Company will design and supply a boiler, combustion system, emissions control components and other equipment for the development of a waste-to-energy, combined heat and power plant in Lidkoping.

With engineering work already in progress, the project appears on track to meet an early 2013 completion target.

In July 2010, Babcock & Wilcox Company had separated from the energy-focused engineering and construction company McDermott International Inc. (MDR) in a tax-free spin-off. In the spin-off, each shareholder of McDermott received one share of Babcock & Wilcox Company for every two shares of McDermott stock that they possessed as of July 9.

In our opinion, the creation of two pure-play companies offered both greater scopes to operate in separate markets with concentrated managerial attention, organized capital allocation as well as superior operational and strategic flexibility.

Babcock & Wilcox Company is engaged in providing clean energy technology and services, primarily to nuclear, fossil and renewable power markets as well as technology and mission critical defense contractors worldwide. The Denmark-based unit B&W Volund supplies equipment and technologies designed to convert household waste and biomass into thermal energy.

Headquartered in Charlotte, North Carolina, Babcock & Wilcox Company currently retains a Zacks #3 Rank, which translates in short-term Hold rating.

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