Tutor Perini Corp., Sylmar, Calif., has purchased Fisk Electric Co. for $105 million in cash and an undetermined amount based on future results.
Privately held Fisk reported 2010 revenue of about $305 million and a $190-million project backlog, although both dropped this year. The firm has worked with Tutor Perini on several projects, including the $8.5-billion CityCenter in Las Vegas.
Based in Houston, Fisk will operate as a wholly owned Tutor Perini unit, with existing senior managers remaining in place.
Publicly owned Tutor Perini had $2.51 billion in revenue for the first nine months of 2010, down 38.3% from $4.07 billion a year prior, according to filings made to the U.S. Securities and Exchange Commission.
“This strategy increases the ability to self-perform work and therefore generates slightly higher margins on contracts,” says Avram Fisher, analyst with BMO Capital Markets, New York City.
Another industry observer speculates that the buyout, announced Jan. 4, “solves the problem” for Fisk CEO Larry Brookshire, of how to liquidate his assets in the form of company shares.