Energy Companies Seek to Diversify, Expand Engineering Capabilities through Acquisitions

---

Researched by Industrial Info Resources (Sugar Land, Texas)--With energy prices at historic highs over the last few years and demand set to continue increasing with population growth, growing revenues have made expansions, diversifications, acquisitions and investments more attractive to players of all sizes. Several energy solutions companies have recently been trying to increase their engineering capabilities through the purchase of engineering and design services companies.

The latest example is Pike Electric Corporation's (NYSE:PIKE) (Mount Airy, North Carolina) purchase of Synergetic Design Holdings Incorporated and its wholly owned subsidiary UC Synergetic Incorporated at a cost of approximately $70 million. UC Synergetic primarily provides engineering and design services for transmission and substation infrastructure, including storm assessment and inspection services.

J. Eric Pike, the chairman and chief executive officer of Pike Electric, described the motivation for the purchase: "UC Synergetic's engineering capabilities complement our existing portfolio of companies, adding scale and extending our footprint in the Northeast and Midwest. This acquisition significantly increases our ability to provide outsourced engineering and other technical services to our customers and is consistent with our long-term growth strategy." UC Synergetic will operate independently from Pike's existing engineering team during the integration process, which is expected to begin in early July 2012. UC Synergetic generated approximately $72 million of revenue during the last 12 months, making this appear to be a very favorable deal for Pike Electric Corporation.

In February of this year, Itron Incorporated, a Washington state-based maker of metering systems and software services for the utility industry, bought SmartSynch Incorporated (Jackson, Mississippi) in a deal worth about $100 million. Itron said in a statement that the acquisition of SmartSynch will add about $50 million in revenues. SmartSynch's technology provides utility customers detailed information about their energy usage. The company has more than 130 customers, including nine of the top 10 utilities in North America.

There are other larger recent examples of this phenomenon. In March 2011, GE Energy (NYSE:GE) (Fairfield, Connecticut) acquired approximately 90% of Converteam (Massy, France), a provider of electrification and automation equipment and systems, for approximately $3.2 billion. Converteam replaces or improves their client's mechanical processes with high-efficiency electric alternatives with the aim of delivering better reliability, less maintenance and lower emissions. The company markets drives and other power electronics, advanced rotating machines, as well as generators and controls in the vertical sectors of offshore and onshore oil and gas, power generation, wind and solar renewables, industrial, and marine services.

Industrial Info Resources will continue to track this trend and keep its clients apprised of new developments.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.