Emcor to buy RepConStrickland for $455 million

Emcor, the Norwalk-based mechanical and electrical construction company, agreed to acquire RepconStrickland, a service provider to the North American refinery and petrochemical markets, for $455 million, strengthening its presence in the energy sector.

Emcor said Monday it would pay cash to purchase the privately held Texas-based firm, whose majority shareholder is an affiliate of the private equity fund ArcLight Capital Partners.

RepconStrickland, which has 340 employees and main offices in La Porte and Corpus Christi, has a 36-year history in the industrial and refinery service business, according to Tony Guzzi, Emcor president and CEO.

The RepconStrickland platform encompassing a spectrum of turnaround and specialty services, including shutdowns, overhauls, capital projects, engineering and constructability reviews, project management, welding services and refractory services.

RepconStrickland, which had revenue of about $400 million in 2012, complements services provided by Emcor’s Ohmstede Industrial Services unit, Guzzi said.

“The acquisition of RepconStrickland strengthens our position in the industrial and energy sectors which are attractive industries poised for future growth,” he said in prepared comments. “RepconStrickland operates in markets adjacent to our existing Ohmstede operations, provides solid long-term growth potential, is resilient during down cycles and creates additional access to high-margin, high-growth markets that will help fulfill many of our strategic goals.”

Based on Emcor’s success in integrating Ohmstede into its operations, Guzzi said he is confident that RepconStrickland will transition quickly into the business.

The transaction is expected to close in early July. The acquisition should significantly accelerate Emcor’s earnings per share in 2014, according to the Norwalk company, with estimated revenues of $6.5 billion in 2013.

Emcor recorded net income of $30.17 million, or 44 cents per diluted share, in the first quarter of 2013, compared with $27.15 million or 40 cents per share for the same period in 2012.

The deal solidifies Emcor’s financial prospects and growth potential, said Nicolas Coppola, an analyst with Thompson Research Group, who has a “hold” rating on the stock.

“It gives them more exposure to the energy industry on the Gulf Coast,” he said, emphasizing the connection with Ohmstede. “Emcor has done a good job positioning itself where there is growth, and this is an example of that. Also, construction has been a challenge, but the construction industry is only going up.”

RepconStrickland is positioned to grow through market share expansion of existing refinery customers and capitalizing on capacity expansions in the petrochemical industry, Guzzi said.

Traded on the New York Stock Exchange under the ticker symbol “EME,” the company saw its share price rise 5 cents to $38.72 on Monday.

Rich.Lee@scni.com

STEPHANIE BORISE FURRER

Business Editor

Hearst Connecticut Newspapers

Connecticut Post, Greenwich Time, The Advocate, The News Times

sborise@hearstmediact.com