Primoris Services Corporation (NASDAQ Global Select: PRIM)
(“Primoris” or “Company”) today announced that it has acquired Sprint Pipeline Services, L.P. (“Sprint”). Based in Pearland (Houston), Texas, Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeast United States.
For the year ended December 31, 2011, Sprint generated revenues of approximately $70 million. The majority of Sprint’s revenues were derived from Master Service Agreements (MSA) with its pipeline customers.
Total consideration was approximately $28 million, $20 million of which was paid at closing and consisted of 62,052 shares of Primoris common stock, valued at $1 million, and $19 million in cash. Incentive provisions, which take into account Sprint’s financial performance over the past several years, could provide additional cash consideration totaling $8 million based on Sprint achieving the following EBITDA (as that term is defined in the asset purchase agreement) targets:
- $7 million for the period March 12, 2012 through December 31, 2012 would result in cash payment of $4 million to the Sellers; and
- $7.75 million for the calendar year 2013 would result in an additional $4 million cash payment to the Sellers.
Sprint will operate as a wholly-owned subsidiary of Primoris as part of the East Construction Services segment. Robert Grimes and Jon Johnson, Sprint’s Managing Partners, have signed employment agreements with Primoris and will continue to operate the business. Under their leadership, Sprint has grown from 25 employees at its founding in November 2004 to more than 350 employees today. Sprint operates four strategically located offices in Texas, along with locations in Louisiana and Mississippi.
Brian Pratt, Primoris’ Chairman, President, and CEO, commented, “Primoris has been active in the energy business for over six decades, and the acquisition of Sprint will allow us to strengthen significantly our geographical presence into the Gulf Coast region. The Sprint team, headed by Robert Grimes and Jon Johnston, has earned a solid reputation for client focus, quality construction and performance. We look forward to working together in this region on energy related opportunities for specialized pipeline construction and related services.”