Skanska USA Invests in Growth of U.S. Industrial Market with Acquisition of Industrial Contractors

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Researched by Industrial Info Resources (Sugar Land, Texas)--Following a trend of engineering and construction firms acquiring strategic assets to improve market share in growing industrial markets, Skanska USA Civil Incorporated (New York, New York) recently announced the acquisition of Industrial Contractors Incorporated (Evansville, Indiana), one of the nation's top 400 construction companies serving the commercial, industrial and power markets. In addition, Skanska has acquired ICI's affiliate companies: Professional Consultants Incorporated; Tri-State Refractories Corporation; and Industrial Equipment Incorporated. The name of the new Skanska operating unit will be Industrial Contractors Skanska.

Industrial Info reached out to Richard Cavallaro, the president of Skanska USA Civil Incorporated and received the following responses to questions regarding the acquisition.

Industrial Info: This looks like a move by Skanska to increase market share of the industrial projects. What industrial sectors does Skanska see as potential growth markets? Power Generation?

Mr. Cavallaro: Yes. By aggregating the resources of Skanska and ICI, we become a significant national competitor in the power and industrial construction markets, while at the same time growing our presence in the manufacturing and industrial hub of the U.S. (Midwest). Through this acquisition, we will bring our heavy civil work to the region, move into the industrial sector and bolster our position in the energy sector. We see the following areas for growth:

• Expected double-digit growth in power maintenance and construction over the next five years
• New power capacity, both to replace coal-fired power and to meet projected future demand
• Environmental regulatory upgrades on power plants
• Hydrocarbons, particularly downstream natural gas, petrochemical and refinery capacity
• Alternative energy--ethanol, coal distillates
• Industrial sector, heavy manufacturing, chemicals and plastics

Industrial Info: Industrial Contractors has been the general contractor on some high-profile projects as of late, like the $500 million Dresden Energy Center in Ohio for American Electric Power and the expansion of the Continental Tire plant in Mount Vernon, Illinois. Are there any other high-profile projects like this coming up on the horizon for the new Industrial Contractors Skanska?

Mr. Cavallaro: Yes. Skanska and ICI share a history of high-profile, complex work, and we are already working on business opportunities as a result of our expanded resources and collaborative effort. Here are a few examples:

• Industrial Contractors Skanska and Skanska USA Civil Southeast are teaming up on a proposal to build a new tire manufacturing facility for Continental Tire in South Carolina.
• We have introduced our expanded capabilities to the TransGas team in an effort to play a lead role in the construction of the coal-to-gasoline project in Mingo County, West Virginia.
• We have teamed up Industrial Contractors Skanska and our West Coast operations to see if we can offer our gasification experience to a greenfield gasification project in the west.

Industrial Info: How will the acquisition benefit Skanska clients?

Mr. Cavallaro: This acquisition benefits our clients, because it allows us to increase our portfolio of services and expand the geographical presence of our heavy civil operations. It provides our clients with the opportunity to leverage strong expertise and capabilities in the power and industrial markets. The partnership allows us to join forces and provide services in the construction management space, including projects in higher education, health care and pharmaceutical, as well as common geographic markets where both ICI and Skanska serve clients, including Indiana, Illinois, Ohio, West Virginia and Kentucky.

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.