Harsco Corp. has sold its minority stake in a joint venture called Brand Energy & Infrastructure Services Inc., a move the company says will help streamline its portfolio and improve profitability.
Cumberland County-based Harsco expects to record a third quarter non-cash accounting loss of approximately $45 million, or 56 cents per share after tax, on the sale of its 26 percent interest in Brand.
Total value of the transaction is approximately $232 million, a figure that includes the termination of certain obligations under the Brand joint venture arrangement with private equity firm Clayton Dubilier & Rice.
Harsco, a midstate industrial conglomerate with worldwide interests, said it received $145 million in cash Thursday in connection with the sale.
Founded in Chicago in 1961 as an insulation company, Brand provides specialty services to the global energy, industrial and infrastructure markets, ranging from scaffolding, coatings and insulation to formwork and shoring and specialty mechanical services. Its U.S. headquarters are in Kennesaw, Ga.
“The formation of the Brand (joint venture) a few years ago was our first major step in the transformation of Harsco,” President and CEO Nick Grasberger said.
“Since that time we have valued our partnership with CD&R and have been pleased with the performance of the Brand business in a difficult market environment,” he added. “The decision to sell our interest in Brand at this time reflects our desire to further reduce the complexity of the Harsco portfolio, strengthen our balance sheet and improve financial flexibility.”
Harsco intends to use the cash proceeds to reduce outstanding debt.
“Other significant benefits to Harsco could include reduced interest costs, increased flexibility with future financings and the potential usage of a capital loss carryforward,” the company said.
Harsco trades on the New York Stock Exchange under the symbol HSC.