Houston-Based Firm Purchases Highway

Sat October 05, 2002 - Northeast Edition

Texas Sterling Construction LP (TSC) has acquired the Kinsel Heavy Highway construction business from a subsidiary of Insituform Technologies Inc.(ITI).

The deal between the two Houston-based companies includes TSC’s purchase of construction equipment for its appraised value of approximately $4.4 million, and the assumption of equipment leases with a future obligation of nearly $1.4 million.

ITI will assign to TSC certain unstarted construction contracts with revenues estimated at $38 million, subject to post-closing adjustments.

TSC also will be engaged by ITI to manage the completion of certain other contracts, in return for a management fee. TSC will hire most employees of the ITI construction crews for the contracts to be taken over, together with project managers and supervisory personnel.

The addition of the contracts ITI will assign to TSC brings the latter’s total construction backlog to approximately $160 million.

Joseph Harper, Sterling’s president, said that the transaction would bring to TSC a significant backlog, with the equipment fleet and job crews to complete the contracts, and would position the company to achieve an increase in its state highway business in the future.