McDermott International Inc. (NYSE:MDR) is undergoing a bit of an interesting restructuring in its Babcock & Wilcox Company subsidiary. It is reorganizing into four groups including the newly formed nuclear power group and launch a new brand identity. The focus here seems to be more nuclear, and the company mentions more of a focus to lead the development of new clean coal and carbon capture technologies. These are key buzzwords for "going greener" for alternative energy investors and this is on the infrastructure side of it.
B&W has formed a new subsidiary, Babcock & Wilcox Nuclear Power Generation Group, Inc. (B&W NPG) that has aligned the resources and capabilities of the overall company to provide nuclear power plant products, services and construction for utilities worldwide. Other units being renamed are as follows:
- Babcock & Wilcox Power Generation Group, Inc. (B&W PGG)…. focuses on providing steam generating equipment and emissions control systems for utilities and industries worldwide, as well as services and parts for the existing fleet of fossil-fueled power plants.
- Babcock & Wilcox Technical Services Group, Inc. (B&W TSG)…. provides management, operational and technical services for government and industry customers, which include the Department of Energy and National Nuclear Security Administration.
- Babcock & Wilcox Nuclear Operations Group, Inc. (B&W NOG)…. specializes in design engineering and manufacturing of nuclear components for the U.S. government.
The truth is that none of these units are actually new as they have been inside McDermott. In fact, if you visit their website you’ll see that they have already designed and manufactured more than 200 nuclear steam generators. This appears to be more of a rebranding and realignment for reporting. It is also unlikely that this would generate a break-up or spin-off candidate because unlike other conglomerates being discounted by Wall Street, the more and more vertical an infrastructure player can become in power generation and facility related construction the better.
Jon C. Ogg
November 27, 2007
Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.
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