MDU Resources Group Inc. acquired one of the nation's largest electrical contractors at the dawn of the new millennium.
MDU, a Bismarck, N.D.-based natural resources company, acquired Kansas City, Mo.-based Capital Electric Line Builders Inc. and Capital Electric Construction Co. Inc. on Jan. 1. The privately held electrical contracting companies, with annual revenues of about $90 million, became part of Utility Services Inc. a wholly owned subsidiary of MDU. MDU has provided energy, value-added natural resources products and services since 1927. Financial details were not disclosed.
Capital Electric, which specializes in power line construction, industrial electrical construction and service and datacom services, ranked 28th on CEE News' 2000 list of the top 50 largest electrical contractors. The company served as the prime contractor for such large-scale projects as the 200-acre Sprint World Headquarters in Overland Park, Kan., and the restoration of the historic Union Station in Kansas City, Mo.
They are a great company with a great management team and a wonderful reputation in the industry as well as the Kansas City area, said Ronald Tipton, president of Utility Services Inc., which formed in 1997. We are extremely proud to have them as a part of our utility services strategy.
Utility Services Inc., a diversified, full-service, electrical, gas and communications design-build company, acquired 17 companies, primarily electrical contractors, in the last three years. Tipton said Capital Electric's expertise in line work and telecommunications complements the existing MDU contractors, which include Wagner and Smith, Dayton, Ohio; International Linebuilders, Portland Ore.; Harp Line Constructors, Kalispell, Mont.; and Pouke and Steinle Inc., Riverside, Calif. With the acquisition of Capital Electric, Utility Services Inc. expects revenues to leap from $100 million in 1999 to $300 million in 2001.
We've been in the electrical contracting business for going on three years and we've been doing that through acquisitions, he said. Capital Electric, being the exceptional company that it is, was a great opportunity for us.
Robert Doran III, current president and CEO, founded the company in March 1957 as a family owned and operated business. Tipton said Doran will continue to lead the Capital Electric family of companies, and the headquarters will remain in Kansas City, Mo.
It's going to be business as usual, Tipton said. The only change will be that we will offer them the ability to be more competitive in their environment with such things as lower cost capital and possibly lower cost insurance.
The acquisition will allow Capital Electric to expand into other business areas, network with other MDU contractors and recruit and maintain employees, Doran said.
I think it provides the opportunity for the Capital Electric companies to be ongoing into the 21st century, Doran said. It will provide the opportunity for growth and long-term employment for our employees and give them the ability to buy stock in a very fine company.
MDU, a publicly traded company, plans to continue to buy union electrical contractors, Tipton said.
If the opportunities present themselves and the right circumstances exist, you bet, we will (do more acquisitions), Tipton said. We're off and running.
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