KBR to Spin Off Mission Technology Solutions into Independent Public Company

KBR, Inc. has announced a strategic plan to pursue a tax-free spin-off of its Mission Technology Solutions segment, a move unanimously approved by the company's Board of Directors. The separation is expected to create two independent public companies, each with enhanced strategic focus and operational independence. According to the announcement, both KBR and its shareholders will benefit from ownership in these two pure-play entities, which are designed to deliver long-term profitable growth and value.

The strategic rationale behind the spin-off centers on creating distinct companies with specialized product and service offerings. Each entity is expected to gain advantages including enhanced management focus, organizational agility, streamlined decision-making processes, and increased end-market focus. The separation will also provide greater capital allocation flexibility to support strategic imperatives, including potential future merger and acquisition transactions. Both companies will have distinct investment profiles tailored to their specific market positions.

Stuart Bradie, KBR Chair, President, and Chief Executive Officer, characterized the announcement as a major milestone in KBR's evolution. "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," Bradie stated. He emphasized that both businesses will retain key elements of KBR's values-driven culture and proven execution approach while benefiting from increased focus on their respective markets.

The newly structured KBR, referred to as New KBR, will focus on Sustainable Technology Solutions (STS). This entity will deliver proprietary intellectual property-protected process technologies aimed at reducing emissions, increasing efficiency, and advancing energy transition. New KBR will leverage its global leadership across more than 85 process technologies, positioning it strongly in ammonia/syngas, chemical/petrochemicals, clean refining, and circular economy markets. The company is expected to benefit from low capital intensity, diversified revenue streams, and robust free cash flow with high conversion rates. Additional information about KBR's operations can be found at https://www.kbr.com.

The spin-off company, referred to as SpinCo, will comprise the Mission Technology Solutions business focused on high-demand national security and space priorities. SpinCo is positioned as a scaled leader with deep domain expertise and mission-critical capabilities for government customers globally. The company benefits from growing budgets driven by secular trends and maintains a capital-light model with diversified, long-duration contracts that provide predictable cash flow. SpinCo has demonstrated success with accretive acquisitions that have expanded capabilities and broadened its customer base.

In connection with the planned separation, KBR announced executive leadership updates. Stuart Bradie will continue as New KBR Chair, President, and Chief Executive Officer post-spin. Mark Sopp, current Executive Vice President and Chief Financial Officer, will transition to oversee the spin-off team, while Shad Evans has been appointed as KBR's new Chief Financial Officer effective January 5, 2026. The Board of Directors has engaged a leading search firm to identify executive candidates to lead SpinCo.

The transaction is targeted for completion by mid-to-late 2026 and is subject to final Board approval, regulatory conditions, and tax treatment considerations. KBR has reaffirmed its fiscal year 2025 outlook despite the announced strategic shift. The company has engaged Goldman Sachs & Co. LLC as financial advisor, with Wilmer Cutler Pickering Hale and Dorr LLP and Baker & McKenzie LLP serving as legal counsel for the transaction.

This corporate restructuring represents a significant development in the engineering and technology services sector, with potential implications for investors, customers, and competitors. The separation allows each entity to pursue specialized growth strategies aligned with distinct market dynamics—New KBR focusing on sustainable technology innovation and SpinCo concentrating on government and national security contracts. The move could create more targeted investment opportunities while allowing both companies to optimize their operational models for their specific customer bases and market conditions.