Brookfield Business Partners reaches deal to sell

Brookfield, News, Oct. November 11, 2022 (GLOBE NEWSWIRE) — Brookfield Business Partners (NYSE: BBUC, BBU; TSX: BBUC, BBU.UN) and its institutional partners (collectively, “Brookfield”) today announced an agreement to sell its nuclear technology services Westinghouse Electric Corporation (“Westinghouse”) to a strategic consortium (“Consortium”) led by Cameco Corporation and Brookfield Renewable Partners for an aggregate enterprise value of approximately $8 billion (the “Transaction”). ) (“Transaction”), which includes disposals of non-core assets expected to be received prior to completion of the Transaction.

Westinghouse is a global leader in providing mission-critical technologies, products and services to the nuclear power industry. The business was acquired from bankruptcy by Brookfield in 2018. Since the acquisition, Brookfield has appointed a new world-class management team and has successfully repositioned the business in new technologies by strengthening its organizational structure, realigning its product and service offerings, optimizing its global supply chain and investing in new technologies.

Under Brookfield’s ownership, Westinghouse’s profitability has nearly doubled, and the business is now ideally positioned to benefit from strong industry tailwinds, driven by the growing recognition that nuclear power is the key to decarbonizing the world. A reliable source of clean energy for the target.

“We are pleased to have entered into an agreement to sell Westinghouse, which delivers meaningful value to our investors and provides significant earnings to support our continued growth,” said Cyrus Madon, CEO of Brookfield Business Partners. Over the past four years, we have significantly improved our business operations, improved our margins and solidified its global leadership position. Westinghouse is a very well-run business today and has a great future ahead.”

Combining the distributions received to date, Brookfield’s expected returns would be equivalent to approximately 6 times its invested capital, a 60% internal rate of return and a total profit of $4.5 billion. Brookfield Business Partners expects to receive about $1.8 billion from the sale of its 44 percent stake in Westinghouse, with the remainder going to institutional partners.

Transaction details

Completion of the transaction will be subject to certain conditions, including approval by Brookfield Business Partners unitholders, regulatory approvals and other customary conditions. The transaction is expected to close in the second half of 2023.

Independent Valuation and Fairness Opinion

The transaction was reviewed by the Brookfield Business Partners General Partner’s Governance and Nominating Committee, which consists of independent directors (the “Independent Committee”).

The Independent Committee has retained an independent valuer and financial adviser who has provided the Independent Committee with a formal valuation as of October 11, 2022, based on its analysis and subject to its Fairness opinion, fair market value of Brookfield Business Partners’ interest in Westinghouse is between $1.265 billion and $1.8 billion. The Independent Committee has also received an opinion from its independent valuer and financial adviser, and as of October 11, 2022, based on its analysis and subject to the various assumptions, qualifications and limitations set forth in its formal valuation and fairness opinion, the total From a financial perspective, the consideration received by Brookfield Business Partners in connection with the transaction is fair to Brookfield Business Partners. The formal valuation and fairness opinion provided to the independent committee excludes Brookfield Business Partners’ expected share of proceeds from the separate sale of non-core assets and estimated cash generated internally by Westinghouse prior to closing. Brookfield Business Partners agreed that the proceeds from the Westinghouse interest from the consortium were within the formal valuation range.

After consulting its independent financial and legal advisors, the independent committee unanimously determined that the transaction was in the best interests of Brookfield Business Partners and recommended to the Brookfield Business Partners Board of Directors that Brookfield Business Partners enter into the transaction. The Board of Directors has unanimously (excluding conflicting directors not involved in the deliberations) approved the transaction and recommends that the unitholders of Brookfield Business Partners hold a special meeting of unitholders (the “Meeting”) to approve the Transaction.

The transaction is subject to “minority shareholder approval,” ie, approval by a vote of more than 50% of Brookfield Business Partners’ limited partnership unitholders, excluding any limited partnership units required to be held by any “interested parties.” Multilateral Instrument 61-101 – Protection of minority security holders in special transactionsAs a result, Brookfield Business Partners LP units (approximately 33% of Brookfield Business Partners LP units) held by Brookfield Asset Management and its affiliates will be excluded from the scope of the minority approval. Copies of the Independent Formal Valuation and Fairness Opinion, factors considered by the Independent Committee and other relevant background information will be included in the Information Circular to be sent to Unitholders attending the meeting. Brookfield Business Partners expects to send this circular in November 2022 and to hold a meeting in December 2022.

Brookfield Business Partners and the consortium have entered into support agreements with the unitholders, who collectively own approximately 37% of the voting power of the Brookfield Business Partners limited partnership unitholders who voted in favor of the transaction at the meeting.

consultant

RBC Capital Markets and BMO Capital Markets served as financial advisors and Weil, Gotshal & Manges LLP served as legal advisor to Brookfield.

TPH & CO., the energy business of Perella Weinberg Partners, acted as independent appraiser and financial advisor, and Stikeman Elliott LLP acted as legal counsel to the independent committee.

Brookfield Business partner is a global business services and industrial company focused on owning and operating quality businesses that provide essential products and services and benefit from a strong competitive position. Investors have the flexibility to invest in our company through the firm Brookfield Business Corporation (NYSE, TSX: BBUC) or the limited partnership, Brookfield Business Partners LP (NYSE: BBU; TSX: BBU.UN).For more information, please visit https://bbu.brookfield.com.

Brookfield Business Partners is the flagship public company of Brookfield Asset Management’s private equity group. Brookfield Asset Management is the world’s leading alternative asset manager with more than $750 billion in assets under management.More information is available at www.brookfield.com.

For more information, please contact:

Cautionary Statement Regarding Forward-Looking Statements and Information

Note: This press release contains “forward-looking information” within the meaning of the Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Act of 1934, as amended the “safe harbor” provisions of the Exchange Act of 1995, the U.S. Private Securities Litigation Reform Act of 1995, and any applicable Canadian securities regulations.

Forward-looking statements include statements that are predictive in nature and depend on or refer to future events or conditions. Forward-looking statements in this press release include statements regarding Westinghouse’s business and its growth and leadership prospects and the transactions described in this press release, including the expected timing of closing, if any, and satisfaction of conditions precedent.

Although we believe that such forward-looking statements and information are based on reasonable assumptions and expectations, readers should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond Our control, which could cause Brookfield Business Partners and/or Westinghouse’s actual results, performance or achievements to differ materially from the expected future results, performance or achievements expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those anticipated or implied by forward-looking statements include, but are not limited to: the effects or unanticipated effects of general economic, political and market factors in the countries in which we do business; including due to the ongoing novel coronavirus the virus (SARS-CoV-2) pandemic, including any variant of SARS-CoV-2 (collectively, “COVID-19”); the behavior of financial markets, including fluctuations in interest rates and foreign exchange rates; global equity and capital markets and these Availability of in-market equity and debt financing and refinancing; strategic actions, including dispositions; ability to complete and effectively integrate acquisitions into existing businesses and the ability to generate expected benefits; changes in accounting policies and methods used to report financial position (including uncertainties related to key accounting assumptions and estimates); ability to appropriately manage human capital; application of the impact of future accounting changes; business competition; operational and reputational risks; technological changes; governmental regulations in the countries in which we operate and Changes in legislation; government investigations; litigation; changes in tax laws; ability to collect arrears; catastrophic events, such as earthquakes; hurricanes and epidemics/epidemics; possible impact of international conflicts, wars and related developments, including Russian Military operations, acts of terrorism, and cyberterrorism; and other risks and factors detailed from time to time in our filings with Canadian and U.S. securities regulators.

In addition, our future performance may be affected by government-enforced restrictions resulting from COVID-19 and the related reductions in global commerce and travel, as well as significant volatility in global stock markets, which could negatively impact our revenue and affect the The ability of future transactions to affect our liquidity position and result in reduced cash flow and impairment losses and/or revaluation of our investments and assets, as a result we may not be able to achieve our expected returns. Please see “Risks Associated with the COVID-19 Pandemic” in the “Risk Factors” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in our most recently filed Form 20-F.

We caution that the preceding list of important factors that may affect future results is not exhaustive. In relying on our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, Brookfield Business Partners undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may arise as a result of new information, future events or otherwise.

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