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Skanska looks to buy U.S. builders specializing in power plants

NEW YORK, Oct 8 – Sweden’s Skanska wants to buy more U.S. builders that specialize in power plant jobs as it seeks to capitalize on a building boom on the back of low energy prices, the company’s incoming Americas chief said.

The U.S. shale gas boom is attracting energy-intensive industries seeking to lower their costs, which is boosting utilities’ needs for new plants and other investments. A government plan laid out in June to slash pollution from power generation is also expected to spur demand.

Skanska, the fourth-biggest builder in the United States, in 2011 bought Indiana-based Industrial Contractors, which focuses on energy projects.

“We are looking for acquisitions in the U.S.,” said Richard Cavallaro, the head of Skanska’s USA civil unit and who will become the head of Skanska’s entire Americas operation in January.

“If we do an acquisition, it will be in the power industrials segment,” he told Reuters in an interview.

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Cavallaro spoke ahead of a presentation on Skanska’s U.S. operations, set to take place in New York on Wednesday, which the group hopes will attract more U.S. investors.

“Since we trade on the Swedish stock market, I don’t think we get the full traction we could get in the U.S. We slide under the radar somewhat,” Cavallaro said. “The purpose of the capital markets day is in part to explain to U.S. investors Skanska’s business strategy and to generate more interest in the company.”

The United States is Skanska’s single biggest market and where it wants to see its fastest growth in the years ahead. The group’s chief executive, Johan Karlstrom, last week told Reuters that the U.S. “re-industrialization” was a trend set to continue for many years.

The company has said in the past that the operating margin of its U.S. civil division – about 8.4 percent during 2013 – was not sustainable. The civil division’s margin is now stabilizing between 6 and 6.5 percent, which is where a high-performing business will be, Cavallaro said.

 

(Editing by Jane Baird and Leslie Adler)