Specialty contractor and infrastructure company, Primoris Services CorporationPRIM , has acquired the assets of Coastal Field Services (Coastal), for $27.5 million. The buyout will help Primoris boost its market share in the Gulf Coast energy market.
Based in Beaumont, TX, Coastal provides pipeline construction and maintenance, pipe and vessel coating and insulation, and integrity support services for leading companies in the oil and gas industry. The company generated EBITDA margins greater than 10%, on revenues of $37.3 million in 2016.
The acquisition of Coastal aligns well with the work performed by Primoris' Pipeline and Field Services groups. Primoris will now be able to offer a wider range of services, including compressor station capital projects, pipeline integrity work, call-out work, and insulation of plant piping and vessels, to its customers.
Primoris Services Corporation Price
Primoris Services Corporation Price | Primoris Services Corporation Quote
Coastal will operate as Primoris Coastal Field Services (PCFS), part of Primoris' Pipeline and Underground segment. Jeff Bridges - former co-owner and president - will continue to manage daily operations as president of PCFS.
Last month, Primoris acquired the assets of Florida Gas Contractors (FGC), a utility contractor specializing in underground natural gas infrastructure. This buyout will broaden the geographic reach of Primoris' Utilities and Distribution segment, as well as expand its presence in the Florida and Southeast markets.
Primoris foresees acquisition opportunities in the near term, especially in the utility and pipeline markets. In addition, benefits from the company's geography and market diversity, along with anticipated boom in capital pipeline construction, will likely bolster revenues.
Primoris has outperformed the Zacks categorized Building Products and Heavy Construction sub-industry over the past one year. The company's shares gained around 28.8%, while the industry recorded growth of 9.5% during this period.
Primoris currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the construction sector include NCI Building Systems, Inc. NCS , Boise Cascade Company BCC and TopBuild Corp. BLD . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
NCI Building has an average positive earnings surprise of 11.28% for the trailing four quarters. Boise Cascade generated an impressive average positive earnings surprise of 114.74% over the last four quarters, while TopBuild pulled off an average positive earnings surprise of 5.98%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
