Tutor Perini Corp.’s purchase of Mississippi-based Anderson Companies gives the Sylmar construction firm a foothold in the Southeastern U.S., a region doing better than others in the country in the construction downturn, industry analysts say. “The entire U.S. construction business certainly has been through a difficult recession over the past couple of years, but it appears the Southeast market is a little more active than probably other parts of the country right now. I think that has to do with more industrial activity, a little bit stronger housing and the movement of people,” said John Rogers, an equity research analyst for D.A. Davidson & Co. Tutor Perini announced on April 4 that it has acquired complete ownership of Anderson Companies, the privately-held parent company of Roy Anderson Corporation, Harrell Contracting Group LLC and Brice Building Company LLC. Tutor Perini acquired all of Anderson Companies’ stock for $64.6 million in cash, plus an amount to be determined based on the acquired company’s operating results for 2011 through 2013. But the value doesn’t end there. Anderson Companies has a backlog of uncompleted work equal to $475 million, fiscal year 2010 revenues of about $287 million and average annual revenues exceeding $400 million over the last five years. It also has 600 employees. The acquired company is headquartered in Gulfport, Miss., with offices in Birmingham, Ala.; Jackson, Miss.; New Orleans and Pensacola, Fla. The group of companies provide general contracting, design-build, preconstruction and construction management services. “I think this is part of their strategy to continue to grow the business and expand,” Rogers said. He added that Tutor Perini already has a strong presence in the West, the Northeast and down in Florida, and adding a Southeast market will likely add to the company’s financial growth prospects. Resources for Anderson Anderson Companies, which will maintain its current senior management, is also looking to benefit from the merger. “We think (Tutor Perini’s) resources will provide an opportunity for Anderson Companies to grow, particularly in the Southeast,” said Roy Anderson, III, who will continue as the acquired company’s president and CEO. Rogers agrees with Anderson’s outlook. • Location: Sylmar<br>• CEO: Ronald N. Tutor<br>• Employees: 3,096<br>• Market Cap: $1.2 billion<br>• PE (ttm): 11<br>• EPS (ttm): 2.13<br>• Closing Price: (as of April 6) $24.97 “For a company like Anderson where you’ve got management staying presumably, by aligning themselves with Tutor Perini, they can go after larger projects,” he said. Anderson Companies, which was founded in 1955, had just acquired Brice Building Company in April 2010, Anderson said. Harrell Contracting Group was acquired about six or seven years ago. Anderson described the group of companies and Tutor Perini as having some similarities. “We do government, we do entertainment, we do gaming, commercial – we do basically the same work, but just in different markets,” Anderson added. Anderson Companies also has expertise in hospitality, government, health care, industrial and educational facilities. Acquisition mode The Anderson purchase continues Tutor Perini’s growth mode. In January, the company announced that it had acquired construction contractor Houston-based Fisk Electric Co. in a deal worth $105 million. The deal was expected to give Tutor Perini additional electrical construction capabilities in support of non-residential building and civil operations. Tutor Perini referred to more deals in its last financial earnings statement. “Finally, with the added capital resulting from our senior notes offering, we are pursuing growth opportunities through acquisitions available in the current market, including our recent acquisition of Fisk Electric which closed at the beginning of the year,” said Ronald Tutor, the company’s Chairman and CEO, in the February statement. In 2010, Tutor Perini had net income of $103.5 million, or $2.13 per diluted share, on revenues of $3.2 billion. For the previous year, the company had net income of $137.1 million, or $2.79 per diluted share, on revenues of $5.2 billion. By the end of both 2010 and 2009, the company had a backlog of uncompleted construction work equal to $4.3 billion.
