California contractor Brinderson LP will join pipeline services conglomerate Aegion Corp. in a $150-million acquisition that closed July 1. The firms say the deal will help them gain a bigger share in oil-and-gas and mining markets.
Publicly-held Aegion, through such subsidiaries as Insituform, Corrpro Cos. and United Pipeline Systems, provides proprietary technologies and services for industrial pipelines and water, wastewater, energy and other infrastructure clients. The parent is based in Chesterfield, Mo.
“This transaction is a continuation of our strategy to expand our earnings by transforming our company from a 450-million dollar wastewater contractor to a diversified provider of infrastructure protection and renabilation,” said J. Joseph Burgess, Aegion president and CEO in announcing the deal on June 25.
Aegion ranks at No. 26 on ENR's list of the Top 200 Environmental Firms.
Costa Mesa-based Brinderson had ranked at No. 288 on ENR’s list of the Top 400 Contractors in 2012, with $187 million in 2011 revenue. The firm did not participate in the annual ENR survey in 2013.
Aegion said that Brinderson had about $231 million in revenue as of March 31.
Brinderson has gone through business restructuring, which fueled the acquisition, according to Aegion. “What most attracted us to Brinderson, was its successful transformation from a project-based construction business into a much stronger maintenance service oriented company,” Burgess said.
Aegion confirms that Brinderson senior management will remain in the firm, including Russell Conda, who had been named president and CEO last year.
Conda had succeeded Gary Brinderson in that role. Brinderson, who became chairman, is not joining Aegion, says the contractor. Conda continues as Brinderson president.
Conda, a 30-year construction veteran in the oil-and-gas sector, had previously been senior vice president and general manager for WorleyParsons’ western operations, based in California. He also served as vice president and director of onshore projects at ABB Lummus Global (now CB&I Lummus) and as senior vice president of operations at Aker Solutions.
Aegion noted Brinderson's loyal client base, noting that the firm derives about 75% of its revenue from recurring businesses.
“After the transaction closes, Brinderson’s annual contribution will boost the current revenue in our energy and mining platform to more than 50 percent,” Burgess said.
Analyst Zack's Equity Research says Brinderson's "long-term association with large and blue chip companies" will help Aegion gain access to energy sector work worth up to $900 million "along with maintaining the facilities used for processing and refining oil and gas products of its energy and mining platform."
While Aegion's first-quarter results were lackluster, according to Zack's, the firm "expects to make up for this slow start to the year during the balance of 2013 on the back of its strong backlog and a robust bid table supporting the opportunity for securing additional projects."
According to the analyst, the Brinderson acquisition "marks the beginning of a strategic effort to expand its capabilities in the US energy market."