New Majority Ownership Offers Brock Group More Opportunities to Grow
The Brock Group (Houston, Texas) has more room to grow in existing and new end-markets under its new majority owner, according to the industrial specialty services provider. American Industrial Partners (AIP) (New York), an operationally oriented private equity firm that makes control investments in industrial businesses serving domestic and global markets, took on majority ownership of The Brock Group effective October 27.
With about 14,000 employees, The Brock Group supports routine maintenance, turnarounds and capital projects by providing services, including scaffolding and work access, insulation, coatings/linings, and asbestos abatement, as well as additional associated services. With a 70-year history, the company is a leading provider of specialty services to some of the largest refineries, chemical plants, utilities and pulp and paper facilities.
Mike McGinnis, chairman and chief executive officer of The Brock Group, told Industrial Info that his company also offers a stellar safety record, McGinnis said. The company logged 33 million work hours in 2016, and has a total recordable incident rate (TRIR) of 0.25, which is "world class," he said. The company performs services both on a union basis and on an open-shop or merit basis.
AIP's majority ownership of Brock has "given a new infusion of capital into the company and has delivered our balance sheet. That will certainly mean more opportunities for Brock employees, and Brock clients."
The Brock Group works primarily in the United States and Canada's western provinces, and now will have the opportunity to expand in other locations, such as the U.S. West Coast, McGinnis said. The company also might be able to expand services, such as fireproofing or refractory work, at industrial facilities, he said.
"If we are working for a customer and it has 10 facilities in the U.S., we may be currently working on only six of them, so this gives us opportunity to take on more work," McGinnis said.
For its part, AIP has completed more than 70 platform and add-on acquisitions and invests in all forms of corporate divestitures, management buyouts, recapitalizations and going-private transactions of established businesses with revenues of $200 million to $1 billion or more. As such, AIP has "abilities and operational expertise in this business that we can capitalize on," McGinnis said.
He added Brock's management team will remain intact under the new arrangement. "AIP is clear it makes investments in companies where it supports the existing management team. It will remain in place. It gives our people the opportunity to focus on the growth of our business as we go forward."
The Brock Group has been able to provide adequate manpower for its customers, McGinnis said, but the rapid expansion of the U.S. petrochemicals sector, particularly along the Gulf Coast, may put a strain on labor availability.
"We have to do a better job in enticing and attracting young people, showing them there are significant careers in scaffolding, insulation and painting," McGinnis said.
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