Harsco Infrastructure and Brand Energy to merge

By Euan Youdale19 September 2013

US private equity firm Clayton, Dubilier & Rice (CD&R) is to merge two of the world's biggest scaffolding and formwork businesses after simultaneously acquiring Harsco Infrastructure from Harcso and Brand Energy from First Reserve.

The new combined business will have total sales of US$3 billion and will be run under the Brand Energy & Infrastructure Services name from its current US head office. Brand chairman and CEO Paul Wood will take charge of the combined business, with other directors coming from both companies.

Harsco will be paid US$300 million in cash plus an equity stake in the business worth around $225 million. First Reserve, the private equity firm that acquired Brand Energy in 2007, has not disclosed the sale price.

Two-thirds of the combined company’s revenues are generated from the energy sector, with a significant level of recurring revenue driven by required maintenance work.

Paul Wood, Brand Energy CEO, said; "The combination of these two groups of strong local operating companies and management teams creates a true global leader in both specialised industrial services and forming & shoring.

"The resulting global footprint will enable us to offer best in class operating capabilities to our customers in the growing energy and infrastructure markets."

Patrick Decker, Harsco president and CEO, said the sale of Infrastructure was the first step in a "strategic transformation of Harsco." He said it strengthened the company's finances and made it a less complex business, and that its equity stake in the new Brand business would allow it to benefit in the future.

Nathan Sleeper, a CD&R partner, said; "We are excited to help build a global leader in both specialised industrial services and infrastructure services.

"We believe that the combined company has a well-positioned global platform, very favourable growth prospects and a deep set of capabilities to serve customers across its diverse end markets.”

The transaction, which was unanimously approved by the Harsco board of directors, is set to be completed before the end of this year.

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