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Friday, November 20, 2009
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BUSINESS TODAY
Business Today for November 19, 2009
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James Construction bought by Primoris
Primoris Services Corp. today announced that it has signed a $135 million deal to acquire Baton Rouge-based James Construction Group L.L.C., one of the largest privately owned construction companies in the Southeast. The deal consists of $7 million in cash; a five-year $53.5 million promissory note with escalating interest of 5 percent to 8 percent; and shares of Primoris preferred stock valued at $64.5 million. The preferred stock will be automatically converted into shares of Primoris common stock after approval of Primoris shareholders. The agreement also contains an incentive provision that could provide an additional $10 million of Primoris common stock based on James Construction Group attaining specified financial goals for the year ending Dec, 31, 2010. For the year ended Dec. 31, 2008, James Construction Group generated revenues of approximately $410 million and an operating profit of approximately $33 million. Primoris expects that the transaction will be immediately accretive to its earnings per share. James Construction Group was founded in 1998. The company has 1,700 employees and does business throughout the Gulf Coast. James Construction Group’s Heavy Civil Division performs road and bridge construction, airport runway and taxiway construction;,and marine facility construction. The Infrastructure & Maintenance Division provides clients with, among other services, earthwork and site development, landfill construction, site remediation, and mining support services. The Industrial Division, with a client base comprised primarily of private industrial companies, provides all phases of civil/structural, mechanical equipment erection and process pipe installation.
Research Park Corp. adopts budget
The Research Park Corp., which operates the Louisiana Technology Park on Florida Boulevard and is a part-owner of the next-door Bon Carré Business Center, adopted a 2010 budget today that’s about 4 percent bigger than projected 2009 year-end numbers. In 2010, the research park’s $1.765 million budget will be 3.6 percent more than estimates of $1.703 million for 2009’s final budget. The state-chartered entity’s chief funding source — slightly more than 1 percent of the city-parish lodging tax — is forecast to fall from $1.34 million in 2009 to $1.14 million next year, a drop of about 15 percent. That’s a conservative estimate based on declining lodging revenues in recent months, said Stephen Loy, interim president of the state-chartered nonprofit corporation. The research park’s key function is operating a more than 230,000-square-foot technology incubator that includes 14 tenants and more than 100 workers, along with funding $907,000 in annual computer data services for the technology park and the business center. Research Park projects receiving $270,000 again this year in dividends from its ownership stake in Bon Carré. It owns slightly less than a quarter of the 1 million-square-foot business center controlled by Commercial Properties Realty Trust, the for-profit affiliate of the Baton Rouge Area Foundation. The budget also includes $200,000 for a potential chief executive officer, a position that hasn’t been filled since it was held by former CEO and current board director Eddie Ashworth. That leadership position could be filled early next year, depending on the outcome of a regional innovation study commissioned by the Baton Rouge Area Chamber, which is examining how incubators and research parks in the region might collaborate better.
Regency to expand in North Louisiana
Dallas-based Regency Energy Partners LP plans a $40 million expansion of its Logansport Gathering system in North Louisiana. Regency will install 4.5 miles of 10-inch gathering lines, route 7.5 miles of 12-inch pipe through more than 17 sections of dedicated acreage in DeSoto Parish and will add approximately 3.2 miles of 24-inch pipe to connect into Regency’s 24-inch Logansport system. “Including this project, Regency and the Haynesville Joint Venture will have approximately $790 million invested in gathering and transportation projects in the Haynesville Shale to meet producers’ demands in this prominent play,” Byron Kelley, chairman, president and chief executive officer of Regency, said in a press release. “This fee-based project further strengthens our position in the Haynesville Shale, which is a key component of our growth strategy.” Regency will also install a gas treating facility with capacity of up to 300 million cubic feet per day. Construction is expected to begin in early December with completion targeted for second quarter 2010.
AAA: Thanksgiving travel to inch up
Travel organization AAA forecasts a 1.4 percent increase in Thanksgiving travel this year compared to 2008’s holiday weekend. The average spending will be $718 and the average distance traveled will be 815 miles for the 38.4 million Americans expected to travel more than an hour or more from home this Thanksgiving, AAA said. Though auto travel will rise 2.2 percent, flights for Thanksgiving will fall 6.7 percent to 2.3 million, AAA projected, which would continue a trend seen throughout the decade. In 2008, Thanksgiving travel fell 25 percent in the wake of the financial and housing crisis but is expected to rebound with rising consumer confidence, AAA said.
NATIONAL/INTERNATIONAL NEWS
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