Dallas-based Primoris strikes $470m cash deal with PLH Group

Dallas-based Primoris Services Corp. will expand its electric distribution business with a $470 million cash deal to acquire PLH Group Inc., positioning the company to capture more investment in the country’s electric grid .

Primoris, a contractor specializing in utility, renewable energy and other energy-related markets, announced the deal on Monday. PLH Group, based in Irving, is a utility-focused specialty construction company working in fast-growing regions of the United States.

Primoris Core Professions.(Primoris investor presentation)

The acquisition nearly doubles Primoris’ power distribution business, increases its skilled workforce by nearly 1,000 employees and accelerates the company’s transition to higher-margin service master agreements generating recurring revenue. Primoris said it expects the deal to increase earnings per share by more than 10 cents within a year and generate annual savings of at least $10 million within two years.

“This acquisition (…) expands our footprint for electric delivery services at a time when improving and expanding our home electric grid is driving massive capital investment in this market,” the CEO said. of Primoris, Tom McCormick, in a statement. It is estimated that $385 billion should be spent to modernize electricity and gas transmission and distribution networks by 2025.

McCormick said PLH is also strong in emerging utility markets such as data centers and renewable power generation connections to the grid. PLH generated $733 million in revenue for the year ending May 31, with pretax profit of $54 million. Nearly 80% of its revenues are associated with electricity distribution and natural gas utilities.

Primoris generated nearly $3.5 billion in revenue last year, ranking 35th among public companies in North Texas.

PLH Group CEO Peter Sandore said the combination will benefit both customers and employees. Private equity firm Energy Capital Partners has owned the company for about a decade.

“Primoris’ broad range of services allows us to offer new capabilities to our existing customers while continuing to advance our core values ​​of safety, integrity, professionalism and teamwork,” he said. he declares. “Furthermore, the size and expanded footprint of Primoris will allow PLH teams to access greater career mobility and more diverse job opportunities in the future.

Scale matters in the electricity and gas markets, McCormick said.

“Many large utilities are trying to consolidate their supply chains and having a bigger presence will make us more competitive when bidding on work,” he said on a conference call to discuss the deal.

The transaction is expected to close in the third quarter, pending regulatory approvals.

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