EMCOR Group Inc., Norwalk, Conn., announced its intentions to acquire Consolidated Engineering Services Inc. (CES), a subsidiary of Archstone-Smith.
Under the terms of the agreement, EMCOR Group, which has 20 electrical branches in the United States and $1.37 billion in 2001 electrical sales, will pay Archstone-Smith approximately $178 million in cash.
Headquartered in Arlington, Va., CES provides a broad array of facility services, including comprehensive facilities management, operation and maintenance, mobile services, remote monitoring, technical consulting and diagnostic services, mission-critical support and installation and support for building systems.
CES employs approximately 3,400 technical and service employees in over 20 states in the Northeast, Midwest, Mid-Atlantic and Southeast regions. Its customer base includes blue-chip clientele in the pharmaceutical, industrial, financial services and commercial markets as well as federal government agencies. CES provides its services to approximately 9,500 facilities comprising approximately 265 million square feet of space. CES currently generates approximately $420 million in annual revenues. Senior management from CES will remain with the company.
A company release said the acquisition makes EMCOR Group a leader in the expanding U.S. market for facilities services. It will significantly increase the proportion of the company's revenues that are generated on a recurring basis, offsetting the cyclical nature of the company's traditional construction business. In addition, CES's contracts with the federal government and state governments establish EMCOR's presence in the market for government facilities services, an opportunity the company intends to develop further.
Frank T. MacInnis, EMCOR's chairman and CEO, said, “Combined with our current operations, this acquisition makes EMCOR a leader in the facilities management field, with pro forma 2002 revenues from this sector of approximately $1 billion, or approximately 25 percent of EMCOR's total business in 2002. The transaction also allows us to combine our EMCOR Facilities Services operations with CES's broad-based facilities services operations and its marketing and management expertise, enhancing the potential of the combined business.
“The market for facilities services management continues to provide an excellent opportunity for growth that complements our presence in our traditional markets. We believe more companies will outsource their facility management needs in order to allow them to focus on their core business, and we look forward to further leveraging this opportunity.”