Aecom sells oil and gas operations to Graham Construction
Global infrastructure consultancy Aecom has sold its oil and gas maintenance and turnaround services business to Graham Construction.
The deal, which is slated to close by the end of January 2022, is part of Aecom’s strategy to exit higher-risk, fixed price construction operations and focus on consulting work. The strategy has been driven by pressure from activist investor Starboard Capital, which wants to increase margins and shareholder value.
Aecom last year sold its civil construction practice to Oroco Capital and its power construction business to Critical Point Capital.
“Today’s announcement furthers the execution of our strategy to focus our efforts exclusively on our higher-margin and lower-risk Professional Services business,” said Troy Rudd, CEO of Aecom. “I thank the leadership and employees of the Oil & Gas maintenance and turnaround services team for their efforts over the years and wish the business the best of success in the future.”
Aecom in the fourth quarter of fiscal year 2021 recorded its strongest margin ever, with an adjusted operating margin on a net service revenue basis of 19.8%. The Los Angeles-based firm, which has approximately 54,000 employees, saw revenues rise 1% to $13.3 billion in FY21.
Calgary-headquartered Graham Construction will acquire a business that generates $550 million in revenue annually. The deal will make it the third-largest construction company in Canada and one of the top 50 construction companies in North America, with more than $3 billion in annual revenue.
“The acquisition of AECOM’s Energy Operations and Maintenance Division is part of Graham’s strategic plan for expanding and diversifying our industrial operations across North America,” said Andy Trewick, Graham’s president and CEO. “It dramatically enhances our ability to provide one-stop services for major industrial clients, from initial construction through lifetime asset maintenance.”
Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Aecom and DBO Partners LLC is serving as financial advisor.
