Brookfield Business Partners ( NYSE: BBU ) with its institutional partners has agreed to sell Westinghouse Electric Co ., its nuclear technology services operation, to an investor group led by Cameco ( NYSE: CCJ ) and Brookfield Renewable Partners ( NYSE: BEP ) for ~$8B.
The total price includes proceeds from the sale of a non-core asset that's expected to be received before the Westinghouse sale closes.
When combined with distributions received to date, Brookfield's ( BBU ) expected proceeds will equate to about 6x its invested capital, a 60% internal rate of return, and a $4.5B of total profit. The company expects to generate ~$1.8B in proceeds from the sale of its 44% stake in Westinghouse.
The deal is expected to close in H2 2023.
Cameco ( CCJ ) stock has dropped 14% in Tuesday after-hours trading, while Brookfield Renewable ( BEP ) stock is unchanged.
Brookfield Renewable ( BEP ), with its institutional partners, will own a 51% interest in the venture to buy Westinghouse, and Cameco ( CCJ ) will own the remaining 49%.
The total enterprise value for Westinghouse is $7.875B. The company's existing debt structure will remain in place, leaving an estimated $4.5B equity cost to the partnership. That means BEP and its institutional partners' equity cost will be ~$2.3B and Cameco's ( CCJ ) will be ~$2.2B.
BEP expects to invest ~$750M to acquire an ~17% stake in Westinghouse, which will be funded through normal course funding initiatives, including asset level upfinancings and asset recycling.
While Cameco ( CCJ ) has available liquidity and committed financing facilities to support the transaction to acquire a 49% stake in Westinghouse, it will pursue a permanent financing mix of capital sources of cash, debt, and equity to preserve its balance sheet and ratings strength.
In September, Cameco ( CCJ ) filed for a US$1.5B shelf offering.
For further details see:
Brookfield Business Partners to sell Westinghouse to Cameco, BEP for $8B