Seeking to expand into new territory and market segments, Skanska USA, New York City, has acquired Evansville, Ind.-based Industrial Contractors Inc., a leading midwest industrial and energy contractor. The $135-million cash deal, announced Dec. 29, also includes three ICI-affiliated companies. Skanska will integrate the units into its Skanska Civil operation and intends to use the new base to expand its transportation services into the Midwest, says Richard Cavallaro, Skanska Civil president and CEO.
ICI ranks at no. 173 on ENR's list of the Top 400 Contractors, with $318.9 million in 2010 revenue. About 53% is in the power sector and 32% in industrial work. Skanska says the firm will report nearly $500 million in revenue this year. About 2,400 employees are joining Skanska.
According to Skanska, ICI has been "consistently profitable." The firm is renamed Industrial Contractors Skanska.
Skanska USA is the eighth largest contractor on the ENR list, with $4.76 billion in 2010 revenue, about half in the general building sector and 21% in transportation. It is a unit of Skanska AB, the Stockholm, Sweden-based contractor that ranks 16th on ENR's list of the Top 225 Global Contractors, with $14.6 billion in global revenue.
"Our strategy has always been to increase our portfolio of services and expand our geographic footprint in the Midwest," says Cavallaro. "The region is home of some of the largest electrical power generating facilities in the country." Adds one observer: "ICI is in the middle of six of the world's largest coal-fired powerplants. The firms see lots of synergy and growth."
Skanska says ICI most recently completed work on a 580-MW natural gas-fired plant in Dresden, Ohio, for American Electric Power that the utility says is set to start up in the first quarter of 2012. ICI listed the value of its work at $55 million, according to ENR records. The firm also noted $35.7 million of work on a coal gasification facility for Duke Energy in Edwardsport, Ind.
According to Cavallaro, ICI President Denny Quinn will continue to run the firm's day-to-day operations. He becomes a Skanska executive vice president in charge of the midwest operating unit. Alan Braun, the Indiana firm's chairman and CEO, becomes chairman emeritus and a Skanska Civil advisor, says Cavallaro. Braun, 67, has been with ICI since 1964, when his father Charles founded the company.
Despite the two firms' size, market and geographic differences, executives say their cultures are "well aligned." Says Braun: "Skanska is a company with a family feel."