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.