Clayton Dubilier & Rice will simultaneously acquire NYSE-listed Harsco Corporation’s infrastructure division and First Reserve portfolio company Brand Energy & Infrastructure Services. CD&R will merge the two companies into a new business under the Brand Energy & Infrastructure Services name.
The new company, which has an enterprise value of about $2.5 billion, will provide specialised industrial services to the energy and infrastructure sectors. Engineering company Harsco will receive $300 million in cash and a 29 percent stake in the new company, initially valued at $225 million. First Reserve did not disclose the sale price for Brand Energy.
Roughly two-thirds of the combined company’s revenues will come from the energy sector, with a “significant level of recurring revenue driven by required maintenance work,” according to a statement.
The transaction is expected to close by the end of the 2013. Morgan Stanley, Citigroup, Goldman Sachs and UBS have committed to provide financing for the deal.
CD&R is raising its Fund IX, which had collected about $2.9 billion as of August, according to Private Equity International's Research and Analytics division. Fund IX has a $5 billion target.
CD&R was founded in 1978 and focuses on investments in North America, Western Europe and Asia. The firm has managed around $18 billion in investments across 56 businesses and maintains offices in New York and London.