The Shaw Group Inc. announced June 18 that it will sell its transmission and distribution division in order to focus on power plant construction and maintenance.
Baton Rouge-based Shaw says it will sell the assets of Shaw Energy Delivery Services Inc. (EDS) to Pike Electric Inc., a wholly-owned subsidiary of Pike Electric Corp., Mount Airy, N.C. for about $24 million in cash. The deal is scheduled to close in the first quarter of 2009.
"It's non-strategic for Shaw," says Shaw spokesman Allen Chapple of the transmission unit. "Nuclear is taking off, we're under contract for first four units," he says. "We're working on seven coal and gas plants right now, and that's where our focus is."
EDS provides design, engineering, procurement, construction and maintenance services for electrical transmission and distribution systems. It had revenue of $108 million in 2007, a small fraction of Shaw's $5.7 billion total earnings in the same year.
Pike Electric outsources electric distribution and transmission in a 19-state area, from the Midwest to the Florida Keys. The acquisition will expand Pike's presence to the West Coast, Southwest, Mid-Atlantic and Pacific Northwest.
Jim Hicks, president of EDS, will continue to lead the engineering, procurement and substation construction side of the business, according to Pike. Neither company would reveal how many employees the acquisition will impact.
"With this divestiture, Shaw's Power Group will better focus on its core service offerings" said J.M. Bernhard Jr., Shaw's chairman and CEO.