First Reserve feels the heat, sells Ohmstede to Emcor

The Emcor Group has announced that it has agreed to acquire Ohmstede, the leading heat exchanger services provider in the US, from First Reserve, the private equity firm that focuses exclusively on the energy industry. The all-cash transaction is valued at approximately $455 million.

Ohmstede, headquartered in Beaumont, Texas is the leading provider of aftermarket maintenance and repair services, replacement parts and fabrication services for highly engineered mission-critical heat exchangers for refineries and petrochemical industries.

Ohmstede provides its clients with unique single-point-of-responsibility services that are unparalleled. Ohmstede Shop Services (OSS) provides repair, replacement, manufacturing, engineering and design for shell and tube heat exchangers, while Ohmstede Industrial Services (OIS) provides specialty call out services, embedded maintenance contracts, turnaround planning and management, and execution.

First Reserve acquired the company in June 2006 for an undisclosed amount. The sale to Emcor, which regulators must approve, is expected to close by the end of September or early October. It is the first acquisition in several years for the Norwalk, Connecticut-based buyer, a mechanical and electrical construction services company.

The Emcor Group is a Fortune 500 company and a worldwide leader in mechanical and electrical construction services, energy infrastructure and facilities. The company said in a statement that the deal should be neutral or add slightly to company profits for the rest of 2007. In 2008, it estimates the acquisition will add about $280 million to revenue and at least 10 cents a share to profits. The acquisition will be financed through a combination of available cash as well as long-term debt.