In a competition that involved at least a dozen global contenders, Milan-based Salini Impregilo has emerged as the apparent winner in its bid to acquire Lane Industries Inc., a major U.S. transportation contractor, as the Italian firm seeks to boost its position in a U.S. market set to grow with soon-to-be-enacted highway funding legislation and more equity financing. Announced on Nov. 12 and expected to close in January, the deal for about $406 million would create a $6.4-billion megafirm, says the buyer.
Cheshire, Conn.-based Lane, which has 4,600 employees, is set to gain from Salini Impregilo’s global position in alternate project delivery and financing. The Italian firm, with about 35,000 employees, now is involved in 26 build-operate-transfer projects, valued at more than $4 billion, and also is a key player in tunneling work through its 1982 acquisition of U.S. contractor S.A. Healy.
Salini Impregilo ranks at No. 62 on ENR’s list of the Top 250 Global Contractors, with $5.1 billion in 2014 global revenue, the bulk outside Italy. Firm backlog now is about $36 billion. Global work includes the Panama Canal, and key U.S. jobs include the San Francisco Metro and Lake Mead intake tunnels, in Nevada. “With Lane, we bring our group to a new, more ambitious level,” says Salini Impregilo CEO Pietro Salini. The deal also would better balance the firm’s exposure between developed and developing markets.
Lane ranks at No. 41 on ENR’s Top 400 Contractors list, reporting about $1.4 billion in primarily transportation revenue, including $83 million in Middle East work. The firm also gained power-sector revenue from two large natural-gas powerplants in Pennsylvania. CEO
Robert E. Alger tells ENR that he will stay in his role and that “Lane will continue to operate as Lane after the closing.” The privately held company is owned by members of the extended Lane family, but he declined to elaborate. Alger says discussions on integration with S.A. Healy “are just beginning.”
Lane made moves into public-private partnerships on two Virginia highway jobs with Fluor Corp. but had minority equity positions, says Alger. It led an $800-million bridge proposal in Pennsylvania, but the pending deal would allow the firm “to look at leading larger projects, seeking larger equity positions and expanding its footprint westward,” says Alger.
Neither Alger nor Impregilo would disclose the names of other bidders, but one industry construction executive who knows Lane said they likely included Korean and Chinese contractors. “Many of us thought the Spanish would have been in the hunt, too, but I never heard that specifically,” he says. Another executive says that, while a European buyer “would put more money on the table than a U.S. firm,” the Lane purchase price “is fair and not overly rich.” The executive says Salini Impregilo’s “tunnel expertise, coupled with Lane’s highway capabilities, should be a powerful combination on the right project.” He notes some risk, “if too much management decision-making is pulled back to Italy,” but said that has not been “a big problem” with Healy.