Balfour Beatty Expands Texas Operations
What a difference a year can make.
In 2009, SpawMaxwell was tapped as Texas Construction’s 2009 Contractor of the Year and praised for its entrepreneurial spirit and flat ownership structure. Now, 2010 finds the Houston-based interior and general contractor a member of the Balfour Beatty Construction family.
“They kept pursuing us and made us a deal we couldn’t refuse,” says Steve Mechler, president of SpawMaxwell in Houston. “The opportunities created already and in the future are huge and endless with the acquisition.”
John Parolisi, Balfour Beatty corporate senior vice president of strategic planning and marketing, says the company had targeted Houston for acquisition because it is a market where being local is important. Balfour Beatty did not want to “parachute into the market,” Parolisi says.
He adds that when Balfour Beatty considered what firms shared a similar focus on clients and people, it reached out to SpawMaxwell.
Doug Jones, Balfour Beatty’s Dallas-Fort Worth division president and CEO, says SpawMaxwell’s stellar reputation made the firm attractive.
“We’re much alike in our cultures and how we treat our people,” Jones says. “We’re proud of the experience we create for our clients.”
Parent company Balfour Beatty plc of London in its annual report stated that it acquired SpawMaxwell for up to $25 million, which allowed the company to provide single-source construction capabilities in the Texas building markets. The acquisition was part of a corporate strategy of expanding in selected geographic markets in the United States.
Balfour Beatty plc entered the Texas market in 2007 when it acquired home-building giant Centex Construction. The company also acquired in 2009 RT Dooley Construction of Charlotte, N.C., for approximately $40 million.
In addition, Balfour Beatty plc last year acquired Parsons Brinkerhoff of New York, prompting a reorganization of its corporate entities along design and construction service lines. Consequently, Charter Builders of Dallas moved from under the Atlanta-based Heery International umbrella late in 2009 to Balfour Beatty Construction.
“With Charter and SpawMaxwell in the family, we are able to create a significant presence in the more highly populated areas of the state,” Jones says. “We’re able to leverage SpawMaxwell’s significant presence and relationships in the Houston market to broaden what we do and get into larger ground-up projects, which is much of what we do in North Texas, and also grow our presence in the K-12 market.”
SpawMaxwell and Charter Builders will retain their names, with a tagline “a Balfour Beatty Company.” The companies did not traditionally compete with each other. Now they will refer to each other. For instance if Balfour Beatty is building a high-rise office building, it will recommend SpawMaxwell for interior build-outs.
“Everybody is independent, but you are connected to a corporate mother ship,” says Mechler, adding that employees still report to him. In addition, employees now have more career opportunities.
Early success “We are looking at how we can move into other markets within the state where one of the groups is already present,” says Charles E. DeVoe III, president of Charter Builders. As an example in Houston, he mentions an attractive K-12 market for Charter. “The entry now becomes more manageable in today’s economy, given that [SpawMaxwell] has office space there,” DeVoe says.
Just months after Charter joined the Balfour Beatty family, the relationship helped SpawMaxwell receive a preconstruction and construction management contract from the Joy School, a private school for special-needs students, to build administrative, classroom and community buildings. The school building committee considered SpawMaxwell but expressed concern about its limited school experience. SpawMaxwell reached out to Charter and put together a profile of the Dallas firm’s extensive school resume and its co-location in SpawMaxwell’s Houston office.
In addition, SpawMaxwell will execute an RT Dooley TelePresence interior up-fit project for Bank of America in Dallas and Houston. Bank of America selected Balfour Beatty as the program manager and design-build contractor to modify existing office space to accept Cisco-installed TelePresence equipment in 50 U.S. metropolitan areas and 10 other countries. SpawMaxwell will handle the 25 Texas locations.
Moving forward The three companies are working on a strategy to increase presence in the Austin-San Antonio corridor. SpawMaxwell has operated an office in the Central Texas market for about 10 years. Charter and Balfour Beatty are moving in. All firms have performed work in the region.
Charter will pursue school projects in additional markets. Balfour Beatty will go after ground-up work in Houston or provide talent to SpawMaxwell so it can take on larger ground-up projects.
Balfour Beatty recently submitted a proposal for a University of Texas M. D. Anderson Cancer Center design-build project, using a Balfour Beatty project manager and superintendents while taking advantage of SpawMaxwell’s relationships in the market
“We wouldn’t have been able to do that as SpawMaxwell before,” Mechler says.
Mechler says the acquisition also allows it to pursue federal projects, larger projects and out-of-state work. Bonding capacity has increased.
“The economy has challenged all of us to reach out and look for innovative ways to grow and expand our businesses and remain profitable,” DeVoe says. “There are services we each bring to the table that we can learn from and improve on.”
Balfour Beatty Infrastructure and Balfour Beatty’s Military Housing Division, both based in Atlanta, also operate in Texas. All entities aim to grow within the state.
“We want to make a real difference,” DeVoe says. “We think the collective strengths will make our ability to serve all of our customers in the state much better than we can do individually.”