KBR, Inc. (NYSE: KBR) today announced a plan, unanimously approved by its Board of Directors, to pursue a tax-free spin-off of its Mission Technology Solutions (MTS) segment. Upon completion, KBR and its shareholders will benefit from ownership in two pure-play public companies with enhanced strategic focus, operational independence, and financial flexibility. The transaction is expected to be tax-free for U.S. federal income tax purposes and is targeting completion by mid-to-late 2026.
The formation of two independent companies with distinct product and service offerings better positions New KBR and SpinCo to deliver long-term profitable growth and value for customers, associates, and shareholders. Each company is expected to benefit from enhanced strategic and management focus, organizational agility, streamlined decision making, increased end market focus, prioritized commercial resources, and greater capital allocation flexibility to support strategic imperatives, including potential future M&A transactions.
Stuart Bradie, KBR Chair, President, and Chief Executive Officer, stated: “Over the last decade, we have successfully transformed KBR into a leading provider of differentiated, innovative, up-market science, technology, and engineering solutions with global scale, global reach, and global impact. Today’s announcement of our plan to spin off MTS and form two pure-play companies marks a major milestone and pivotal step in KBR’s evolution to unlock the next phase of value creation.”
New KBR, comprising the Sustainable Technology Solutions (STS) business, will deliver proprietary IP-protected, process technologies that reduce emissions, increase efficiency, and advance energy transition. With trusted global capabilities and a strong track record for delivery, New KBR will continue to provide synergistic advisory and consulting services, high-end digitally enabled engineering, design, and program management across the asset lifecycle. New KBR is expected to benefit from its low capital intensity, access to diversified revenue streams, and robust free cash flow with high conversion rates.
SpinCo, the Mission Technology Solutions (MTS) business, is aligned to high demand national security and space priorities, with growing budgets driven by secular trends. SpinCo is expected to continue to benefit from its capital light model, diversified, long duration contracts with predictable cash flow, robust backlog, and strong marketplace positions. SpinCo has a history of successful, accretive acquisitions that have expanded capabilities and broadened its customer base.
In connection with the plan, KBR announced executive leadership updates. Post-spin, Stuart Bradie will serve as New KBR Chair, President, and CEO. Mark Sopp, current EVP and CFO, will oversee the spin-off. Shad Evans has been appointed CFO of KBR, effective January 5, 2026, and will assume the role of New KBR CFO post-spin. The Board has engaged a leading search firm to select executive candidates to lead SpinCo.
The transaction is subject to final approval by KBR’s Board of Directors and customary conditions, including receipt of a favorable opinion of legal counsel and/or a private letter ruling from the IRS, effectiveness of a Form 10 registration statement with the SEC, and other regulatory approvals. KBR is reaffirming its previously issued fiscal year 2025 outlook. Goldman Sachs & Co. LLC is acting as financial advisor, with Wilmer Cutler Pickering Hale and Dorr LLP and Baker & McKenzie LLP serving as legal counsel.
