KBR, Inc. ( KBR ) said Wednesday its board approved a plan to spin off its Mission Technology Solutions business, creating two independent public companies. The transaction, expected to be tax-free, is targeted for completion by mid-to-late 2026.

The move will divide the Houston-based company into “New KBR,” which will concentrate on sustainable technology, and “SpinCo,” which will focus on government services tied to national security and space.

New KBR will house the Sustainable Technology Solutions segment, offering more than 85 process technologies across energy transition, chemicals, refining and circular economy markets. The unit expects to generate growth through low-capital operations and strong cash conversion.

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SpinCo will serve global government customers in defense and space, benefiting from long-term contracts and a history of acquisitions that have expanded its capabilities. KBR said the unit’s capital-light model and predictable revenue will help drive growth in areas backed by rising budgets.

Current Chair and CEO Stuart Bradi will remain at New KBR. Mark Sopp, the company’s finance chief, will oversee the spin-off process before transitioning to a new role.

Shad Evans will succeed Sopp as chief financial officer in January 2026 and continue in that position post-separation. A search is underway for SpinCo’s leadership team.

The restructuring comes as KBR faces a securities class action lawsuit tied to the termination of a Transcom contract. Investors allege potential violations of securities law.

KBR reaffirmed its 2025 financial outlook and said it will hold investor days ahead of the separation.

Price Action: KBR shares were trading higher by 8.70% to $52.00 premarket at last check Wednesday.

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