Bankruptcy judge approves Shaw Group's purchase of IT Group
WILMINGTON, Del. — Shaw Group Inc., an energy industry construction company, won approval from a bankruptcy judge to buy most of IT Group Inc.'s assets for $185 million.
U.S. Bankruptcy Judge Mary Walrath gave final approval Thursday after three days of hearings. The sale of the assets, which will become Shaw Environmental and Infrastructure Inc., should close next week, IT Group said.
Baton Rouge, Louisiana-based Shaw agreed in January to pay $105 million in cash and stock and assume $55 million in debt to acquire IT Group, an environmental services company that filed for bankruptcy protection in January. Shaw has since agreed to pay another $20 million in IT Group's expenses and to pick up another $5 million in debt.
An acquisition spree that started in 1998 left IT Group, formerly known as International Technology Corp., with too much debt. The company listed $1.08 billion in debts in its Chapter 11 petition.
IT Group, which provides maintenance services at the Kennedy Space Center in Florida and the Stennis Space Center in Mississippi, reported earning half of its 2000 revenue of $1.44 billion from U.S. government contracts. The Monroeville-based company also helped the U.S. Environmental Protection Agency test for the anthrax bacteria.
The committee of unsecured creditors in IT Group's bankruptcy case wanted IT Group to reorganize and continue operating instead of selling.
"The debtors are so single-mindedly focused on the proposed sale with Shaw that they have failed to make any meaningful steps towards reorganization since filing for Chapter 11," the committee said in court papers. "Because no efforts have been made by the debtors to explore a reorganization, the court should not countenance the debtors' fire sale to Shaw."
Shares of Baton Rouge, La.-based Shaw fell 12 cents to $32.39. Shares of IT Group were unchanged at less than 1 cent.
Shaw, the largest provider of industrial piping systems in the U.S., also builds power plants and provides design and engineering services to the energy industry.
