US-based construction company MDU Resources Group’s board of directors has authorised a plan to spinoff the company’s fully owned construction services unit.
The spinoff of MDU Construction Services Group is planned to be completed by the end of next year.
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The process will be concluded as a tax-free spinoff to MDU Resources and its stockholders, thereby creating two independent, publicly listed companies.
The number of shares to be distributed and the particular transaction structure will be defined once the spinoff is completed.
MDU Resources president and CEO David Goodin said: “We expect this strategic move to significantly enhance the value within our businesses by creating two focused, independent companies that are publicly traded while achieving our stated goal of transforming MDU Resources into a pure-play regulated energy delivery business.
“We are proud of the growth our businesses have experienced and are confident now is the time for them to operate separately to best serve our customers, employees, communities, and shareholders.
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By GlobalData“As announced today in a separate news release, the business achieved record third-quarter earnings. With backlog of $1.85bn as of Sept 30, MDU Construction Services Group is positioned to continue on its path of significant growth.”
According to Goodin, following the spinoff, MDU Resources and MDU Construction Services Group will have more capacity to concentrate funds and resources towards achieving their respective strategic objectives.
MDU Resources’ regulated energy distribution companies had a combined rate base of approximately $4bn as of 30 September this year.
Within the next five years, this combined rate base is estimated to expand at a compounded annual rate of 6%-7%.
