Halliburton Plans Engineering Unit IPO

The initial public offering and engineering and construction markets are ripe for the sale of KBR shares, says Halliburton's CEO.
Stephen TaubJanuary 27, 2006

Halliburton Co. reportedly is planning to sell a minority stake in KBR, its engineering and construction unit.

Dave Lesar, the parent company’s president and chief executive officer, told analysts in a conference call that it plans to file for an initial public offering of shares in KBR after it files its annual report, according to the Associated Press. “We believe the IPO market in general and the public market for engineering and construction companies in particular is very attractive and the public valuation of KBR will benefit Halliburton’s stock price,” he said.

Halliburton’s plan is to sell 20 percent of KBR shares in the IPO, CFO Cris Gaut reportedly stated in the call. In response to inquiries, the company might consider selling some pieces of KBR, he added, noting that Halliburton “would not expect such sales to change our IPO plans.”

The announcement came on Friday, the day after Halliburton reported that it earned $1.1 billion in the fourth quarter, compared with a net loss of $203 million last year. For its part, KBR reported $3 billion in total revenue in the fourth quarter.

The news apparently sent Halliburton’s share price to an all-time high of $81 on Friday. It closed at $79.05, up more than 5 percent from the prior day’s close.

KBR has a high profile as a result of its extensive work in Iraq and its ties to Vice President Dick Cheney, who served as the company’s chief executive from 1995 through 2000.

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