The sale of the 114-year-old Charlotte, N.C., construction company was announced April 29. The firm also confirms that president and CEO Alfred Neffgen and executive vice president and Chief Financial Officer James Bowden have resigned. J.P. Bolduc, a member of Jones board and former president and CEO of W.R. Grace & Co., was elected interim president and CEO.
Restructuring began in April when the company announced it would sell Rea Construction Co., a Charlotte-based highway contractor, and all noncore businesses. Included in the sale of core units will be J.A. Jones/Tompkins Builders, which has a $54-million contract to build the World War II Memorial in Washington, D.C. J.A. Jones Inc. has seven on-going businesses to shed but expects to sell them as 13 individual units, Bolduc says. Proceeds will be used to pay Jones bank and surety debt, an amount Bolduc would not release.
Jones will restructure around three units, beginning with Lockwood Greene, the Spartanburg, S.C., engineering firm. The others are Charlotte-based J.A. Jones Services, its operations and maintenance arm, and J.A. Jones Community Development Co., which builds military housing. "In the end, we will have a company in excess of $1 billion a year," Bolduc says.
The decision to sell J.A. Jones Inc. piece by piece came as the second offer to buy the entire company failed. Last year, an offer by U.K. contractor Balfour Beatty fell through at the last minute. A Saudi Arabian buyer, doing business as MBI International, then offered to buy Jones last September but put off payment month after month, Bolduc says. By March, MBIs purchase contract expired, allowing Jones to proceed with another sale.
The insolvency administrator for Germanys Philip Holzmann AG, which owns J.A. Jones Inc. stock, wanted to sell the entire company. "Selling the whole enchilada was challenging," because of the firms diversity, says Bolduc. Jones has businesses ranging from software provider to hotel management. In fact, failure of the Balfour Beatty sale stemmed from shareholders who did not want to be involved in such noncore businesses, he says.
The piece-by-piece selloff will generate more cash than the sale of the whole, says Bolduc. Buyers are already showing interest. "We are currently talking to seven people interested in the construction company," he says. The offering memorandum for J.A. Jones Construction is set to be issued May 12..A. Jones Inc. is adding to the list of assets it needs to sell in order to pay down its debt, this time cutting to its core by putting J.A. Jones Construction Co. on the block.