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NEWS RELEASE
CHICAGO BRIDGE & IRON COMPANY N.V.
FOR IMMEDIATE RELEASE: FOR FURTHER INFORMATION CONTACT:
DECEMBER 29, 2000 MEDIA: BRUCE STEIMLE (815) 439-4006
ANALYSTS: JEAN BROWN (815) 439-4072
CB&I COMPLETES ACQUISITION OF HOWE-BAKER INTERNATIONAL
COMBINATION CREATES $1 BILLION ENGINEERING AND CONSTRUCTION COMPANY
PLAINFIELD, ILL. -- Dec. 29, 2000 -- Chicago Bridge & Iron Company N.V.
(NYSE & AEX: CBI) today completed its acquisition of Howe-Baker International,
L.L.C. Based in Tyler, Texas, Howe-Baker is a global technology company
specializing in the engineering and construction of hydrocarbon processing
plants for customers in the refining, petrochemical and natural gas industries.
"The acquisition of Howe-Baker is a key element in CB&I's strategy to
improve shareholder value by increasing earnings per share through sustainable
growth in revenues," said Gerald M. Glenn, Chairman, President and CEO of
Chicago Bridge & Iron. "The combination of CB&I and Howe-Baker offers
substantial opportunities for growth by expanding Howe-Baker's business into new
geographic areas and by leveraging the expected upturn in the hydrocarbon market
over a larger business.
"This acquisition joins CB&I's global sales force and international
infrastructure for project execution with Howe-Baker's process engineering
know-how, modular construction expertise, and low-cost, fixed price contracting
capability. Together, we are positioned to become the preferred provider of
turnkey design-build services in the hydrocarbon processing industries."
In 1999, Howe-Baker's pro forma revenues (including recent acquisitions
for the full year) were $308 million and net income was $26 million. CB&I's 1999
revenues were $675 million and net income was $18 million. Howe-Baker
International will operate as a subsidiary of Chicago Bridge & Iron Company, and
will continue to be run by its current management team, led by President and CEO
Ronald D. Brazzel.
Howe-Baker International has about 2,000 employees and operates three
principal business units: Howe-Baker Engineers, L.L.C. based in Tyler, Texas;
Matrix Engineering, Ltd., based in Beaumont, Texas; and Callidus Technologies
L.L.C., based in Tulsa, Oklahoma.
Under the terms of the transaction, CB&I paid $28 million in cash and
issued 8.1 million shares of common stock to the seller, WEDGE Group
Incorporated -- a private investment firm based in Houston, Texas, that owned
100% of Howe-Baker International -- and assumed certain liabilities. WEDGE, in a
subsequent transaction, sold 4.3 million shares of CB&I common stock to First
Reserve Corporation at a price of $16.25 per share. First Reserve is a private
equity fund manager specializing in the energy industry with over $1.7 billion
under management.
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WEDGE and First Reserve have agreed to a shareholder agreement with
CB&I covering board representation, standstill provisions, voting restrictions
and transfer restrictions. WEDGE and First Reserve each designated two
candidates who were elected to CB&I's Supervisory Board at an extraordinary
meeting of shareholders held Dec. 15, 2000. They will assume their new positions
early in January 2001. As a result, the Supervisory Board will expand from eight
to 12 members.
Any statements made in this release that are not based on historical
fact are forward-looking statements and represent management's best judgment as
to what may occur in the future. The actual outcome and results are not
guaranteed, are subject to risks, uncertainties and assumptions and may differ
materially from what is expressed. A variety of factors could cause business
conditions and results to differ materially from what is contained in the
forward-looking statements including, but not limited to, the uncertain timing
and the funding of new contract awards; cost overruns on fixed priced contracts;
increase in competition by competitors; fluctuating revenues resulting from the
cyclic nature of the individual markets in which the Company's customers
operate; reduced activity in the hydrocarbon industry, demand from which is the
largest component of the Company's revenue; no assurance that the Company will
be successful in modifying or replacing its existing Revolving Credit Facility
to meet its financing requirements; the Company's ability to successfully
consummate the Pitt-Des Moines, Inc. transaction; and the Company's ability to
integrate and successfully operate acquired businesses, including Howe-Baker
International, L.L.C. and certain divisions of Pitt-Des Moines, Inc., and the
risks associated with those businesses. Additional factors are set forth in the
Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q
and Current Report on Form 8-K (as amended) which describe other factors that
could cause actual results to differ from such forward-looking statements, as
well as the Company's other filings with the Securities and Exchange Commission
(including, but not limited to the "Risk Factors" disclosed in its Registration
Statement on Form S-1 [File No. 333-18065], as amended). The Company does not
undertake to update any forward-looking statements contained herein, whether as
a result of new information, future events or otherwise.
CB&I is a global engineering and construction company specializing in
the design and engineering, fabrication, field erection and repair of bulk
liquid terminals, storage tanks, process vessels, refrigerated storage and
process systems, and other steel plate structures and their associated systems.
Howe-Baker International, L.L.C. is a global technology company specializing in
the design and engineering, fabrication and construction of hydrocarbon
processing plants for customers in the petroleum, petrochemical and natural gas
industries. Information about Chicago Bridge & Iron is available from the
Company's Web site at www.chicagobridge.com.
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