KBR is acquiring BE&K for $550 million in cash, ending 35 years of private ownership for BE&K, one of the most prominent open-shop employers in the industry, and giving KBR a big presence in industrial construction again.

KBR, also an open-shop employer, is a much bigger company with 50,000 employees and 2007 revenue of $8.7 billion. It was spun off from Halliburton, the oil and gas services giant, in April, 2007 and KBR shares are traded on the New York Stock Exchange. The company has had about $900 million in cash.

The planned deal, forecast to close in as few as 45 days, is expected to boost KBR’s revenue significantly. Based in Birmingham, Ala., BE&K had revenue and backlog for the year ending March 30, 2008 of about $2 billion each. During the past decade BE&K has greatly expanded its market reach and services.

Chip Schneider, KBR’s vice president and interim chief financial officer, told analysts May 7 that the deal fits the company’s strategy of targeted acquisitions and returns KBR to prominence in industrial construction after the company had been fading in that area. “After seeing our presence wane,” Schneider says clients asked, “‘Are you serious’” about construction?

In announcing the acquisition, KBR’s chief executive, Bill Utt, notes BE&K’s prominence in both design and contracting in pulp and paper, chemicals, industrial process, aerospace and food processing. He points out that BE&K’s offices concentrated along the Southeastern U.S. fit nicely with KBR’s Texas and Gulf of Mexico locations. The acquisition also gives KBR BE&K’s Poland and Russia operations and a foothold in health care and education buildings.

Utt praised BE&K’s brand recognition and its management’s skill and integrity. The company has been known for its tightknit culture in which key employees feel personally connected to and valued by top management. This strong culture helped BE&K fend off campaigns by building trades unions when for a number of years BE&K became a symbol of confident, unapologetic nonunion employers, led by Kennedy, one of its founders.

“It’s the end of an era,” says one staff member who asked not to be named.

As the battles with the building trades faded, BE&K built a versatile services company that kept close tabs on risk.

Michael T. Goodrich, BE&K’s chief executive, is one of five major shareholders. At 63, Goodrich, a 34-year company veteran, says he is remaining with BE&K for the foreseeable future but would not be more specific. He says that Ted Kennedy, one of BE&K’s founders, remains active in the company.

Altogether, BE&K has about 100 shareholders, including the company’s profit-sharing plan.

Goodrich owns the overwhelming majority of the stock, however, according to reliable industry source. And BE&K had been looking for a buyout deal for awhile, sources say.

The KBR acquisition will provide financial resources to allow BE&K to better compete on the world stage with Fluor and Bechtel, says Goodrich. A spokesman for BE&K says the company was beginning to hit a wall beyond which it couldn’t expand without new financial resources.

Asked if the deal is also an exit strategy for major shareholders near retirement age, Goodrich says, “I wouldn’t say that. It’s a plan as we near retirement age. Several of the major shareholders will continue on.”

To continue without the buyout would have limited BE&K, “even without shareholder retirements,” says Goodrich.

The two companies do know each other well.

In recent years BE&K had hired a number of KBR executives.

“We’ve known KBR people and we’re comfortable with their culture,” says Goodrich.