Integrated Electrical Services, one of the largest contractor roll-up firms in the 1990s, has recently sold two electrical contracting businesses.
IES said it sold substantially all of the assets of two of its commercial business units for a sale price of approximately $7.5 million in cash. IES said in October it planned to divest several commercial businesses.
The two businesses IES sold are Britt Rice Electric Inc., College Station, Texas; and Delco Electric Inc., Oklahoma City. Britt Rice Electric has been involved in nearly every recent construction project on the Texas A&M University campus.
IES, Houston, is ranked the nation’s biggest electrical contractor, according to EC&M magazine.
Roddy Allen, IES’ CEO, said in a press release, “I am pleased to announce these additional sales, as it shows our diligence in moving forward with our strategic plan to improve IES’ profitability and operating efficiency. We will continue to provide regular updates to the market on our divestiture progress.”
During 2004, the two units sold had combined revenues and operating income of $38.7 million and $1.5 million, respectively. The net proceeds from these sales will be used to retire IES’ senior secured indebtedness.
On a cumulative basis since Nov. 29, 2004, IES has completed three sales and received approximately $11.5 million in cash. During fiscal 2004, these units produced combined revenues of $57.6 million and operating income of $1.1 million.
IES posted a net loss of $134.4 million in its 2004 fiscal fourth quarter ending Sept. 30. IES also announced that because of stricter financial requirements of its surety bond provider, it would no longer pursue some large construction projects that require that contractors post larger surety bonds.