November 27, 2007 -- Emcor Group is growing again with the acquisition of a California-based, privately held industrial mechanical construction and maintenance company.
The purchase of Performance Mechanical Inc., with headquarters in Pittsburg, Calif., continues a series of acquisitions that the Norwalk-based mechanical and electrical construction services, energy infrastructure and facilities services company has made in the past four months.
In August, Emcor acquired Air Systems Inc. of San Jose, Calif., and Fuller Air of San Diego, Calif. The businesses focus on heating, ventilation and air conditioning work.
In September, Emcor bought Ohmstede Ltd. from Greenwich-based First Reserve Corp. for about $455 million. Ohmstede, which maintains and repairs heat exchangers used in the oil and petrochemical industries, has five facilities along the Gulf of Mexico.
Founded in 1985, Performance Mechanical has annual revenues of about $90 million. It is an industrial mechanical contractor providing process piping and equipment installation, civil, structural, instrumentation and boiler installation and repair.
PMI's work is found at electrical generating plants, food and beverage producers, pipeline compressor and metering stations, manufacturing facilities and water treatment plants. The newest Emcor unit also does maintenance for refineries, terminals and chemical plants.
Its capabilities allows PMI to occupy a prime contracting relationship with many customers, according to Frank MacInnis, chairman and chief executive officer of Emcor. Terms of the transaction were not disclosed.
"PMI has leading positions in the refinery and power plant markets and a long-standing reputation as a premier mechanical construction and services company," MacInnis said. "For many customers, PMI maintains a continuous presence in their facilities, providing both construction, maintenance and work-order task management."
Emcor has provided industrial electrical contracting and maintenance services to several of PMI's customers in the San Francisco Bay Area through its Contra Costa Electric Inc. subsidiary, which has operated for more than 60 years.
"With the addition of PMI, Emcor now offers an optimal combination of industrial mechanical and electrical construction and maintenance services, serving refineries and industrial facilities in the Bay Area," MacInnis said.
Emcor is successfully diversifying its holdings and developing a portfolio of businesses that are not severely affected by the volatility of the construction market, said Tahira Afzal, an analyst with KeyBanc Capital, who does not own Emcor stock.
"They've had a very nice run because of the nonresidential construction growth in the U.S. They have a lot of cash," Afzal said, adding that Emcor is targeting "non-cyclical" companies. "They want to be ready for a downturn."
Emcor has used its cash to acquire companies like Performance Mechanical, she said.
Source: Stamford Advocate
