McDermott to explore strategic alternatives for Lummus Technology

Source: press release, 20 September 2019

Lummus Technology’s petrochemical technology portfolio – one of the industry’s most diversified – includes building block processes for a wide range of products derived from olefins and aromatics
Lummus Technology’s petrochemical technology portfolio – one of the industry’s most diversified – includes building block processes for a wide range of products derived from olefins and aromatics (photo: McDermott)

McDermott International, Inc. has announced it recently received unsolicited approaches to acquire all or part of Lummus Technology, McDermott’s technology business, with valuation exceeding USD 2.5 billion. Based on the receipt of these approaches, McDermott is exploring strategic alternatives to unlock the value of Lummus Technology while maintaining the strategic rationale of engineering, procurement and construction (EPC) pull-through.

McDermott’s Lummus Technology is a licensor of proprietary petrochemicals, refining, gasification and gas processing technologies, and a supplier of proprietary catalysts and related engineering. With a heritage spanning more than 100 years, encompassing approximately 3,100 patents and patent applications, Lummus Technology provides one of the industry’s most diversified technology portfolios to the hydrocarbon processing sector.

“Lummus is an excellent business, with incredibly impressive employees, that has earned a reputation for expertise, innovation and reliability in the refining and petrochemical industries,” says David Dickson, President and Chief Executive Officer of McDermott. “The process of exploring strategic alternatives is part of our ongoing efforts intended to improve McDermott’s capital structure, and we plan to use the proceeds from any transaction involving Lummus Technology to strengthen our balance sheet. While Lummus is an important business within McDermott, we have decided to undertake a process to fully realise its strategic and financial value.”

Separately, McDermott’s previously announced processes to sell the remaining portion of its pipe fabrication business and its industrial storage tank business are ongoing.

McDermott has retained Evercore as the lead advisor on the strategic alternatives process for Lummus Technology.