EMCOR Group, Inc. announced that it has entered into an agreement to sell its Toronto-based Canadian subsidiary, Comstock Canada Ltd. to CCL Equities, Inc., an Ontario-based corporation. In connection with the sale, EMCOR expects to receive approximately CAD $16.9 million in payment for the shares and approximately CAD $25.5 million in repayment of indebtedness owed by Comstock to EMCOR Group, Inc. CCL Equities, Inc. was recently organized by certain members of Comstock management and outside investors for the purpose of acquiring Comstock.
Comstock performs electrical and mechanical construction services primarily in the health care, nuclear, and industrial markets in Canada. In 2010, Comstock generated revenues of approximately $269.3 million and operating income of approximately $0.3 million. For the first six months of 2011, Comstock had revenues of approximately $99 million and an operating loss of approximately $0.4 million.
The transaction is expected to close in the 2011 third quarter.
Tony Guzzi, president and CEO of EMCOR, commented, “This transaction reflects our strategy of focusing on our core operations in which we have both the expertise and scale necessary to generate strong returns. While Comstock is a well-established, quality business, we believe there are greater opportunities to deploy our capital in areas that will create more value for EMCOR. Like our recent purchase of USM, this transaction should enhance our overall profitability and reduce volatility in our financial performance. Overall, we believe this is an excellent transaction for all parties involved. We wish Comstock’s management team and their partners all the best in their future endeavors.”
