Companies in the U.S. Energy Department nuclear cleanup sector are still trying to gauge the impact of Fluor’s decision to divest its government contracting business.
There are still far more questions than answers among DOE contractors, subcontractors, and workforce, several sources said following the Tuesday announcement from the Texas-based engineering and construction giant.
“Nobody really knows what it means,” and people are basically “shrugging their shoulders,” a principal with a DOE subcontractor said by telephone Wednesday.
Fluor is rumored to be leading a team seeking to become the new environmental remediation provider at the Oak Ridge Site in Tennessee, the source said. The AECOM-led URS/CH2M Oak Ridge (UCOR) now holds a nine-year, $3.2 billion decontamination and decommissioning contract due to expire in July 2020. Firms planning to partner with Fluor on this or other upcoming procurements could be concerned, wondering whether key personnel at the company will be kept in place by new owners, the source noted.
Fluor management announced the planned 2020 divestiture during a conference call on a strategic review the company launched in May after it changed CEOs amid troubling quarterly financial results and a falling stock price.
The announcement has not shored up Fluor’s stock performance. At market close Wednesday the stock was at $19.18 per share, compared to almost $21 on Thursday, Sept. 19. A year ago, the stock was trading at more than $58. Its 52-week low, recorded in August, was $16.25.
As for who would buy Fluor, speculation in weeks prior to the Tuesday announcement focused on Jacobs. But a source with another major DOE contractor now thinks a more likely buyer would be an investment house, or venture capital firm, which might then spin off portions of the Fluor government portfolio it does not want.
Fluor hopes divesting its government group and certain other assets will raise $1 billion. Including joint ventures, Fluor’s government sector has more than 28,000 employees and more than 40 current projects, according to the company.
