EMCOR Group Inc., Norwalk, Conn., plans to sell its Toronto-based Canadian subsidiary, Comstock Canada Ltd. to CCL Equities, Inc., an Ontario, Canada-based corporation.
In connection with the sale, EMCOR expects to receive approximately CAD $16.9 million in payment for the shares and approximately CAD $25.5 million in repayment of indebtedness owed by Comstock to EMCOR Group Inc. CCL Equities, Inc. was recently organized by certain members of Comstock management and outside investors for the purpose of acquiring Comstock. The transaction is expected to close in the 2011 third quarter.
Comstock performs electrical and mechanical construction services primarily in the health care, nuclear and industrial markets in Canada. In 2010, the company generated revenues of approximately $269.3 million and operating income of approximately $0.3 million. EMCOR was ranked at the largest electrical contractor in the United States in EC&M magazine’s most recent Top 50 Electrical Contractors listing, with $1.66 billion in 2009 sales.
Tony Guzzi, president and CEO of EMCOR, said in a press release announcing the sale, “While Comstock is a well-established, quality business, we believe there are greater opportunities to deploy our capital in areas that will create more value for EMCOR. Like our recent purchase of USM (USM Services Holdings, Inc.), this transaction should enhance our overall profitability and reduce volatility in our financial performance.”
EMCOR’s acquisition of USM Services Holdings in May gave it additional clout as a provider of facilities maintenance services for large retail, banking, and other commercial companies across the country. USM has annual sales of approximately $375 million in facility maintenance services for approximately 150 customers in more than 75,000 locations in all 50 states and Canada.