Aegion Corp., a leading provider of water, energy and industrial pipeline and facility infrastructure construction and maintenance, has agreed to a purchase by affiliates of private equity firm New Mountain Capital LLC, the firms said Feb. 16.
The deal is valued at about $963 million.
Under terms of the agreement, set to close in the second quarter and subject to a stockholder vote, New Mountain would acquire all outstanding shares of Aegion common stock for $26.00 per share in cash. That is a 21% premium over the contractor's closing stock price of $21.45 on Feb.12, the firms said.
Aegion, based in Chesterfield, Mo., ranks at No. 82 on ENR's Top 400 Contractors list, reporting $1.12 billion in 2019 revenue, of which $267 million was outside the U.S. About 53% is in industrial and energy sector work, and 45% comes from water and wastewater markets. Aegion is No. 30 on ENR's Top 200 Environmental Firms ranking.
The firm reported a $28-million loss in its latest quarter that ended Sept. 30, with next-quarter and year-end 2020 results due to be aired on March 10. The firm said in December it plans to shed its oil-and-gas-services unit to limit impact from the transitioning market and focus on its core water and wastewater sector.
Aegion said in the sale announcement that it expects the reported financial results “to be in line with expectations.”
New Mountain said it will “review the previously announced sales process” for the energy services unit and “determine what best positions the business for long-term success.”
Aegion's board “unanimously approved” the acquisition, which follows a “comprehensive evaluation of potential value-creation opportunities,” said Stephanie Cuskley, its chairwoman.
Charles R. Gordon, Aegion president and CEO, said that the firm in recent years has been “actively reshaped into a more streamlined and focused company. This transaction provides stockholders a premium valuation, recognizes the value our team has created and represents a new chapter for our company.” He said the purchase would enable the firm, “as a private company,” to “have the resources and long-term approach to build on our progress and further enhance our differentiated portfolio of technologies.”
Gordon, who announced his retirement last July, will stay in his roles through the deal closing, but neither Aegion nor New Mountain provided an update on the outcome of a CEO successor search that began last year.
The private equity firm has acquired several construction sector companies in recent years, including Inframark, a water system operations and maintenance contractor, last December. New Mountain also acquired telecom firm Pearce Services last April and TRC Cos., a major infrastructure engineer and CM firm, in 2017.
Aegion, which also operates in mining and industrial facility maintenance, developed from the former Insituform Technologies company, which had a proprietary trenchless pipeline technology. The firm acquired contractor Brinderson in 2013.