Williams Industrial Services Group Inc. Files for Bankruptcy and Agrees to Asset Sale to EnergySolutions
Williams Industrial Services Group Inc. (WLMS), a prominent provider of infrastructure-related services to blue-chip clients in the energy and industrial sectors, has made a significant announcement today. The company has filed voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware and reached an agreement to sell most of its assets, including nuclear, fossil, energy delivery, and paper mill operations, to EnergySolutions for $60 million.
EnergySolutions, a global leader in energy and industrial services headquartered in Salt Lake City, UT, has entered into a purchase agreement with Williams Industrial Services Group Inc. Under this agreement, EnergySolutions will acquire the majority of Williams' assets and assume certain operating liabilities for $60 million. The assets being sold are those that have remained profitable and hold strong potential for future growth. Notably, EnergySolutions will not be acquiring Williams' operations connected to water contracts in Florida and Texas.
Tracy Pagliara, President, and CEO of Williams Industrial Services Group Inc., expressed confidence in EnergySolutions as the new owner, anticipating growth opportunities in the global nuclear renaissance and energy and industrial infrastructure services. The decision to file for Chapter 11 was not an ideal outcome, but necessary to ensure that the profitable segments of Williams' business continue to operate as a going concern under EnergySolutions' ownership.
Ken Robuck, President, and CEO of EnergySolutions, shared his excitement about the transaction, highlighting the strategic benefits for both companies. The acquisition will enable EnergySolutions to expand its nuclear services offerings and support the drive for clean, carbon-free energy through nuclear plant life extension and new technology construction. Robuck believes that Williams' businesses being acquired will complement EnergySolutions' existing business lines, positioning the company for future growth and expansion within the nuclear industry.
To facilitate necessary funding during the Chapter 11 proceedings, Williams Industrial Services Group Inc. has secured commitments for two debtor-in-possession (DIP) financing credit agreements from its prepetition lenders. These agreements, subject to Bankruptcy Court approval, will provide the company with the liquidity required to continue normal operations, meet obligations to employees, vendors, and customers, and execute the sale process for the businesses that EnergySolutions is the "stalking horse" bidder for.
The transaction with EnergySolutions is part of a sale process under Section 363 of the Bankruptcy Code, wherein EnergySolutions is the "stalking horse" bidder. The Bankruptcy Court will evaluate competing offers during the Chapter 11 auction process, with Williams managing the bidding process and reviewing bids with the assistance of advisors. The aim is to conclude the sale by September 30, 2023, subject to Bankruptcy Court approval.
Several factors led to Williams Industrial Services Group Inc.'s Chapter 11 filing and sale process. The loss of significant customer contracts in early 2022, accounting for 19% of annual revenue and 20% of gross profit in 2021, resulted in a loss of $361 million in backlog for 2022 and beyond. Additionally, operating losses of over $15 million in the water operations from 2021 through 2023 further exacerbated the financial challenges. Despite efforts to reduce costs and improve performance, the company was unable to overcome these obstacles and ensure profitability.
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