Babcock & Wilcox divests renewable service subsidiary to Hitachi Zosen Inova

Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE: BW), has completed the sale of its Danish subsidiary, Babcock & Wilcox Renewable Service A/S (BWRS), to Hitachi Zosen Inova AG (HZI) based in Zurich, Switzerland. The transaction, finalized on June 28, 2024, was valued at $87 million, subject to customary fees and adjustments.

BWRS, a key player in the waste-to-energy sector in Northern Europe and the UK, employs over 160 individuals specializing in aftermarket parts and services. The acquisition by HZI marks a significant shift in ownership and operational focus, aligning with B&W’s strategy to streamline its business model.

Kenneth Young, Chairman and CEO of B&W, elaborated on the strategic rationale behind the sale: “This transaction aligns with our previously announced intention to strategically sell certain non-core businesses and assets, and proceeds will be used to reduce our debt, increase our liquidity and support working capital.”

The sale is part of B&W’s broader strategy to focus on its core operations and technologies, including advanced DynaGrate combustion grates, state-of-the-art boilers, and sophisticated fuel and ash handling systems. These technologies are essential for supporting new builds and large-scale upgrades in the waste-to-energy sector across Europe and globally.

Young also highlighted the financial health and forward-looking prospects of B&W: “Energy demand in the utility and industrial sector is rapidly increasing, which is reflected in our higher bookings and full-year outlook within our segments and businesses as we move forward. Accordingly, we are reiterating our previously stated Full Year 2024 Adjusted EBITDA target range of $105 to $115 million, excluding BrightLoop and ClimateBright expenses.”

The divestiture of BWRS to HZI is a calculated move by B&W to enhance its financial structure while maintaining focus on its primary market competencies. This strategic sale not only helps B&W streamline its operations but also allows it to better allocate resources towards more lucrative and core business areas. For HZI, acquiring BWRS expands its footprint in the waste-to-energy market and enhances its service offerings in a region poised for growth in renewable energy solutions.