Tutor Perini Corporation (NYSE: TPC) a leading civil construction company, has announced that it has acquired 100% ownership of Frontier-Kemper Constructors, Inc. (“Frontier-Kemper”), an Indiana-based provider of construction services and related manufactured products to the tunnelling and mining industries.
Frontier-Kemper builds tunnels for highways, railroads, subways and rapid transit systems. It also constructs tunnels, shafts and other facilities for water supply and wastewater transport and develops and equips underground mines with innovative hoisting, elevator and vertical conveyance systems for the mining industry.
Headquartered in Evansville, Ind. with office locations in Pelham, N.Y., and Seattle, Wash., Frontier-Kemper employs over 600 people and has current backlog of approximately $300M. Revenues in fiscal year 2010 were approximately $148M.
Under the terms of the transaction, Tutor Perini acquired 100% of Frontier-Kemper’s stock for approximately $61 million in cash and assumed approximately $52M of debt, of which $35M was paid off at closing. Tutor Perini financed the transaction with proceeds from its senior note offering that closed in October 2010.
Frontier-Kemper will continue to operate under its current name and will be managed by its current senior management team, with W.D. Rogstad remaining as President and CEO.
Mr. Rogstad said: “We are proud of the solid reputation we have achieved in our industry over Frontier-Kemper’s 110-year history of reliable execution. Joining Tutor Perini presents exciting opportunities for both our customers and employees. We are eager to leverage Tutor Perini’s national presence and civil expertise to expand our reach and capture new opportunities.”
Ronald N. Tutor, Chairman and CEO of Tutor Perini, said: “Frontier-Kemper is an ideal fit for our civil business and will significantly bolster our tunneling business in the United States and expand our reach into Canada. They have a proven track record of timely execution of complex projects for their customers. We welcome the Frontier-Kemper employees to Tutor Perini and look forward to the opportunities ahead.”
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52 million is a huge amount of debt.