Tutor Perini Considers Sale Offer
Big contractor confirms board committee is evaluating a buyout
Tutor Perini's directors are considering a buyout offer, the company reported.
According to the company, a special board committee "expects" that chief executive Ronald N. Tutor would retain his management role and remain a significant shareholder. The company (NYSE-TPC) says it has retained Goldman Sachs to serve as its financial advisor and the law firms Gibson, Dunn & Crutcher and DLA Piper to serve as its legal counsel for a potential transaction.
No further comment on the potential deal, first reported by Reuters, will be made, Tutor Perini stated. The company has booked a significant loss, mainly on fixed-price projects in fiscal 2019.
In December, a state court jury in Seattle awarded $57.2 million in liquidated damages to the Washington State Dept. of Transportation in a dispute between the agency and contractor Seattle Tunnel Partners, a joint venture between Dragados USA and Tutor Perini Corp. The award was for damages related to a multi-year shutdown of the State Route 99 tunneling project under downtown Seattle after the Hitachi Zosen-made Bertha tunnel-boring machine broke down in December 2013.
The company took a $119-million charge related to the verdict.
For 2019, including the after-tax goodwill impairment charge of $330.5 million (an impact of $6.58 per diluted share), Tutor Perini recorded a net loss of $387.7 million, or a $7.72 per share, compared to net income of $83.4 million, or $1.66 of per share, in 2018.
“Though I am not happy with the charges we were required to take in 2019," Ronald Tutor stated, "I am encouraged by our strong operating cash generation and backlog growth for the year.”
The focus in 2020 will be on delivering revenue and earnings growth from company backlog and improving operating performance in the company's specialty contractors group.
"We will also pursue various new high-margin project opportunities and continue to make progress in resolving and collecting our unbilled receivables.”
Tutor Perini operates several prominent contractors, including infrastructure company Lunda Construction and building contractor Rudolph & Sletten.