Burns & McDonnell has acquired AZCO Inc., a 250-employee industrial contracting company in Wisconsin, in a stock-and-cash deal.
The financial terms of the acquisition, which was completed Friday, were not disclosed.
Chief executive-elect Ray Kowalik said AZCO gives the Kansas City-based engineering firm a “missing piece” in its construction business.
“One of the business lines that is the highest growth in our industries is the ability to do engineering-procure-construction — some people call it design-build services,” Kowalik said.
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The arrangement allows Burns & McDonnell to use AZCO’s construction expertise instead of relying as much on subcontractors for a project.
“Before this transaction, we would have to hire subcontractors and have multiple subcontractors on a site to complete a job,” Kowalik said. “But what we lacked was this integrated team where we are one company working toward the common goal of getting a project completed for our customer.”
AZCO, which has 160 employee-owners and 90 union craftsmen working in its Appleton location, will remain in Wisconsin as a wholly owned subsidiary of Burns & McDonnell.
Both companies are structured as an employee stock ownership program, which made the acquisition easier to consummate.
Burns & McDonnell discussed an acquisition of AZCO in 2012 but could not come to terms, according to Kowalik. Those discussions resumed in April this year and eventually worked out.
Kowalik said acquisitions are rare for Burns & McDonnell, as such deals require partners that share similar corporate cultures and approaches to working with clients.
With last Friday’s acquisition, Burns & McDonnell has about 5,700 employees companywide.
John Trottier, president and CEO of AZCO, said a unanimous vote of his employee-owners agreed to join Burns & McDonnell’s ESOP structure.
“This transaction is a good thing for us,” Trottier said.
The two firms have worked together on projects as far back as 1999. Both companies recently completed work on the Empire Riverton Power Plant, a natural gas power station in southeast Kansas.