LG&E Picks Up Leading Pipeline Construction Co.
LG&E Energy Corp. positioned itself to take advantage of the
expanding pipeline construction industry last Friday by purchasing
CRC Holdings Corp., parent of the pipeline construction equipment
company CRC-Evans Pipeline International, for a total of $83.5
million. The deal closed last Friday. No layoffs are expected.
LG&E Energy purchased the entire Houston-based company for
an initial consideration of $45.6 million and retirement of $37.9
million in CRC-Evans debt. The transaction also provides for future
payments based on CRC-Evans meeting certain financial targets. The
initial purchase and related costs will be paid 55% in cash and 45%
in LG&E stock. LG&E will repurchase company common stock on
the open market to fund the stock portion of the purchase.
Venture capital investment funds Equus II Inc. and Natural Gas
Partners IV L.P. also owned interest in CRC-Evans and were bought
out by LG&E. Members of the CRC-Evans team will continue
running the company as a branch of LG&E's subsidiary, LG&E
The projected demand for pipeline construction, which is the
result from natural gas being the fuel of choice for power
generation, was a key factor in the decision to buy CRC Holdings,
LG&E said. This demand has caused a 58% increase in pipeline
miles constructed from 1995 to 1998, the Lousiville-based energy
company estimated, and it believes this trend will continue
CRC-Evans supplies equipment for purchase and rental, and other
services to major pipeline construction contractors, but it does
not perform actual pipeline construction.
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