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EMCOR Group, Inc. Acquires Consolidated Engineering Services; Acquisition to Strengthen EMCOR's Faci
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01/16/2005
Business Editors
NORWALK, Conn.--Dec. 19, 2002--EMCOR Group, Inc. (NYSE: EME) today announced that it has acquired Consolidated Engineering Services, Inc. (CES), a subsidiary of Archstone-Smith (NYSE: ASN).
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.
Headquartered in Arlington, Virginia, CES employs approximately 3,400 technical and service employees in over 20 states in the Northeast, Midwest, Mid-Atlantic and Southeast regions. CES's 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.
Under the terms of the agreement, EMCOR Group will pay Archstone-Smith approximately $178 million in cash. The acquisition is expected to be immediately accretive to the Company's earnings.
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 U.S. Federal 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, Chairman and CEO of EMCOR Group, stated, "We are very pleased to have completed this acquisition and to be working with the team at CES. This transaction represents a major milestone in EMCOR's operational strategy. 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 $1.0 billion, or approximately 25% 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."
Mr. MacInnis concluded, "The CES acquisition strengthens our capabilities, further diversifies our markets, and expands our geographic reach. Going forward, we believe that the market for facilities services management continues to provide an excellent opportunity for growth that complements our presence in our traditional markets. We believe that more and 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."
EMCOR was advised on the transaction by UBS Warburg.
EMCOR Group will host a conference call to discuss the acquisition on Friday, December 20, 2002, at 9:00 a.m. Eastern Standard Time. You can access the live call via the Internet through the Home Page of the Company's Web site at www.emcorgroup.com.
EMCOR Group, Inc. is a worldwide leader in mechanical and electrical construction services and facilities services. This press release and other press releases and information can be viewed at the Company's Web site at www.emcorgroup.com.
This release may include "forward looking statements". These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, general economic and business conditions, business opportunities that may be presented to and pursued by the Company and other factors, many of which are beyond the control of the Company. Actual results may differ materially from those anticipated in the statements.
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CONTACT: EMCOR Group, Inc., Norwalk R. Kevin Matz, 203/849-7938 or Morgen-Walke Associates, New York Eric Boyriven, Paul Johnson Media contact: Laura Novak 212/850-5600
