BWXT Inc to acquire Kinectrics

Tuesday, 7 January 2025

Toronto-headquartered Kinectrics operates two core business areas: commercial power services and nuclear medicine. Its commercial nuclear services portfolio includes support for all stages of the nuclear power plant lifecycle and other areas of the related grid ecosystem, and it is also a supplier of medical radioisotopes including lutetium-177.

BWXT President and CEO Rex Geveden described Kinectrics as a "strong and growing nuclear services company with a comprehensive portfolio of offerings to commercial nuclear players globally", with a wide base of customers, many of which are new to BWXT.

The combination of these capabilities with the offerings of BWXT's Commercial Operations segment will enable an expanded portfolio of products and services for current and new customers in the global nuclear power and radiopharmaceutical industries, BWXT said. "In the commercial nuclear power market, Kinectrics brings a broad suite of lifecycle support services that will further strengthen BWXT's position in the CANDU reactor market, while increasing its exposure to the US market and select international markets," it added.

"This acquisition expands our ability to deliver end-to-end solutions to existing and new customers more efficiently," BWXT Commercial Operations President John MacQuarrie said, adding that the investment "uniquely brings together two industry leaders with complementary expertise and service offerings in the growing commercial nuclear power and nuclear medicine markets" and will strengthen the company's ability to meet evolving customer needs. "This includes supporting utilities as they explore ways to expand nuclear power generation through life extensions and new builds, partnering with small modular reactor designers seeking comprehensive regulatory, engineering, manufacturing, and aftermarket solutions, and collaborating with healthcare partners who require reliable isotopes for under-supplied medical isotopes revolutionising oncology," he added.

Kinectrics produces ytterbium-176, a stable isotope used for the production of non-carrier-added lutetium-177 through irradiation at the Bruce nuclear power plant. Production of lutetium-177, through the Isogen joint venture partnership with Framatome, is not expected to change, Geveden told investors, the acquisition "adds a very important therapeutic isotope to our portfolio".

Developing ecosystem
 

Turning to small modular reactor projects, Geveden said the combination of Kinectric's offerings in project areas such as design, engineering, project integration and field testing would be complementary to BWXT's manufacturing capabilities, while Kinectric's transmission and distribution project area would be vital for "getting that power out" to customers or to direct users such as data centres. "We're trying to create an ecosystem [for small modular reactors] … as customers select partners long-term, we have the whole map figured out."

Kinectrics employs more than 1300 engineers and technical experts located across its 20 sites worldwide. The acquisition is targeted to close in the middle of this year, and will nearly double the workforce of BWXT's Commercial Operations and expand its capabilities, including lifecycle management, specialised plant services and engineering, to support the North American and international nuclear markets, the company said. Kinectrics will operate as a BWXT subsidiary, and its financial results will be reported within BWXT's Commercial Operations segment, and its current President and CEO David Harris will continue to lead the organisation, reporting to John MacQuarrie.

BWXT said the investment, which it expects to be "modestly accretive to BWXT's earnings", is "one of BWXT's strategic steps in response to current and anticipated demand for nuclear projects and services worldwide", following an announcement in 2024 of a USD60 million expansion at its facility in Cambridge, Ontario, to increase the plant's footprint by 25 percent and create more than 200 long-term jobs for skilled workers, engineers and support staff in the area.

The announcement of the Kinectrics acquisition came shortly after BWXT completed its acquisition of L3Harris' Aerojet Ordnance Tennessee, Inc. The provider of advanced speciality materials, fabrication and high-strength alloy manufacturing is also the sole provider of depleted uranium to the US government, and will operate within BWXT's government operations segment.