China Construction America Inc. is building on its organic growth in the U.S market with the acquisition of Plaza Construction Corp., New York City.
The U.S. arm of China State Construction Engineering Corp. Ltd., CCA has operated in its Jersey City, N.J. base for 20 years. This is its first U.S. acquisition.
Terms of the acquisition were not disclosed, but New York City-based Fisher Brothers, a family-owned real estate investment company that has owned Plaza since 1986, says the sale is prompted by the parent's "desire to focus on the development side of the business."
"With CCA’s procurement and bonding capabilities supporting us, we will also have the fuel to drive the company’s growth," said Wood in the statement.
He added that while "core industries are taking [Plaza and Fisher Brothers] down different paths at this crossroads, I will remain closely associated with the family and look forward to working with them.”
Plaza says that Lester Rivelis, the firm's former outside attorney, will become chief operating officer and general counsel.
Miami-based Brad Meltzer, will retain his post as President, Southeast region. Dan Peyton will continue as senior vice President of the Mid-Atlantic region.
According to one industry analyst who is not authorized to speak for the firm, CCA aims to become "a $2-billion company," but has had challenges in overcoming "emotional" reactions from U.S. firms to a buyout offer from a Chinese government-owned firm.
"It was tough to get people to take their money," he said.
But the Fisher family, looking to exit the risk-laden construction market, "listened to the Chinese who really courted them." According to the source, Plaza was not widely touted for acquisition.
CCA President Ning Yuan says the stock acquisition "represents the culmination of many months of planning and research during which we were focused on how to best integrate our skill sets and cultures."
Yuan adds that "we have developed a strong relationship with Plaza already."
Another observer who also sought anonymity said that CCA will continue its acquisition program and that affiliated firm China Rail "also is looking."
CCA ranks at No. 130 on ENR's list of the Top 400 Contractors, reporting $466 million in 2012 construction revenue.That ranking is up from No. 159 on the previous Top 400 list. The firm reports that 58% of its 2012 revenue was in building markets, with 42% in transportation. It also reports that 53% of the revenue was from construction management-at-risk work.
Plaza Construction ranks at No. 94 on that list, with $604 million in 2012 revenue. That ranking was up from No. 154 on the previous annual list.
CCA is part of a joint venture, with Halmar International, that is managing the $407-million rehabilitation of the Alexander Hamilton Bridge in New York City, including the I-95 corridor between Amsterdam Avenue and Undercliff Avenue in the Bronx. The project was set for completion this month.
The firm also is involved in what it says is the largest single-phase resort ever constructed in the Caribbean—the 1,000-acre, $3.6 billion Baha Mar Casino and Resort in the Bahamas that is set to open next year.
While the industry analyst speculates on Plaza's future "disengaged" from the Fisher enterprise, Wood terms the deal "a once-in-a-lifetime opportunity" and insists he would not have agreed to it if he did not think it would foster growth for Plaza and more services for clients.
The firm says it is "thriving" in building markets in New York, Miami and Washington, D.C.