LG&E Energy Corp. positioned itself to take advantage of theexpanding pipeline construction industry last week by purchasingCRC Holdings Corp., parent of the pipeline construction equipmentcompany CRC-Evans Pipeline International, for a total of $83.5million. The deal closed on Friday. No layoffs are expected.

LG&E Energy purchased the entire Houston-based company forinitial consideration of $45.6 million and retirement ofapproximately $37.9 million in CRC-Evans debt. The transaction alsoprovides for future payments based on CRC-Evans meeting certainfinancial targets. The initial purchase and related costs will bepaid 55% in cash and 45% in LG&E stock. LG&E willrepurchase company common stock on the open market to fund thestock portion of the purchase.

Venture capital investment funds Equus II Inc. and Natural GasPartners IV L.P. also owned interest in CRC-Evans and were boughtout by LG&E. Members of the CRC-Evans team will continuerunning the company as a branch of LG&E’s subsidiary, LG&ECapital Corp.

“Acquiring CRC-Evans is consistent with our strategic goal ofacquiring energy-related companies that add value to ourshareholders. LG&E Energy will realize immediate earningsaccretion in 1999 from the transaction and CRC-Evans shouldcontinue growing as the demand for new and rebuilt pipelines aroundthe world escalates,” said Roger Hale, LG&E Energy’s CEO.”CRC-Evans will continue to execute its strategy of expanding thebusiness through growth of existing services and acquisitions inrelated fields.”

The projected demand for pipeline construction, which is theresult from natural gas being the fuel of choice for powergeneration, was a key factor in the decision to buy CRC Holdings,LG&E said. This demand has caused a 58% increase in pipelinemiles constructed from 1995 to 1998, the Lousiville-based energycompany estimated, and it believes this trend will continueworldwide.

“CRC-Evans has an excellent reputation with the world’s leadingpipeline contractors. We will continue providing high qualitycustomer service and personal involvement with our key customers,”said Victor Staffieri, LG&E COO. “In addition, leveragingCRC-Evans’ expertise with LG&E Energy’s internationalexperience will allow us to develop an even wider network ofproducts and services.”

CRC-Evans supplies equipment for purchase and rental, and otherservices to major pipeline construction contractors, but it doesnot perform actual pipeline construction. CRC-Evans’ headquarterswill remain in Houston, with manufacturing and maintenanceoperations in Tulsa, Okla., and sales and administrative offices inthe United Kingdom, the Netherlands and Canada.

LG&E Energy Corp., headquartered in Louisville, Ky., is adiversified energy services company with businesses in powergeneration and project development, retail gas and electric utilityservices, and asset-based energy marketing. Internationally,LG&E Energy owns interests in and operates power plants in sixstates as well as in Spain, and owns interests in three natural gasdistribution companies in Argentina.

John Norris

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