Harsco Corporation (HSC - Free Report) recently agreed to sell non-core operations of the Infrastructure segment to the U.K. based Wernick Group, an independent hirer and manufacturer of modular and portable buildings. The financial terms of the transactions were not disclosed.
These non-core operations include Rovacabin and Eventlink, related to accommodation and event services businesses in the U.K. Management stated that the divesture will enable the Infrastructure segment to concentrate more on core operations comprising construction, civil works and industrial maintenance, and also help in trimming down the cost base to ensure future earnings growth.
Last year, Harsco chalked out a restructuring plan for the Infrastructure segment and these divestures indicate the completion of the restructuring program. The company estimates incurring $85 million to $90 million in the fourth quarter of fiscal 2010.
Harsco planned to reduce 30% of its branches and offices and 800 employees located in North America, Europe, the Middle East, Africa and Latin America. Management expected additional savings of $40 million in fiscal 2011 and annual savings of $60 million from fiscal 2012.
For the first quarter of fiscal 2011, Harsco's Infrastructure segment generated revenues of $262 million, up 4% from the year-earlier quarter. The segment reported a negative operating margin of 6.7% compared with the negative operating margin of 7.7% in the year-earlier quarter.
Management expects uncertainties and challenges in major end markets of the Infrastructure segment. The company believes that it will be well positioned to project prospects of the Infrastructure segment for fiscal 2011 at the end of the second quarter of fiscal 2011.
Based in Pennsylvania, Harsco Corporation is a diversified, multinational provider of market- leading industrial services and engineered products to a variety of industries that are fundamental to the world’s economic growth and progress. The company directly competes with ThermoGenesis Corp. and SPX Corporation .