Arden Engineering Constructors Inc., a $34 million Pawtucket company
whose local projects include Providence Place, has been acquired by New
Jersey energy provider PSEG Energy Technologies Inc.
The deal, announced Jan. 4, calls for PSEG to pay an undisclosed
amount of cash for 100 percent of Arden’s stock. Arden’s company name
will remain the same, however, and no firings or new hires are expected,
officials said.
The deal, which had been in the works for about 10 months, allows
Arden to expand more quickly and gives its employees opportunities to
develop themselves, said President Robert H. Bolton. One hundred forty
people work out of its Narragansett Drive site.
“When we grow it will provide a lot of opportunities for the people
that work here,” Bolton said. “Before, being a closely held corporation,
those opportunities may or may not have been there.”
For PSEG, which sells electricity and gas to industrial and
commercial clients in deregulated Northeast markets, the purchase of
Arden is the latest in a series of purchases it plans to make from
Massachusetts to Maryland. It has also recently acquired Philadelphia-
based Fluidics Inc., a $60 million mechanical/service contractor.
And two or three more purchases are planned for 1999, some of which
will be in New England, said Frank Cassidy, president and chief
executive officer of the company, based in Edison, N.J.
Companies such as Fluidics and Arden, Cassidy said, benefit from
mergers because they belong to a relatively small industry,
characterized by small companies. Consolidation provides for greater
economies of scale and a synergy between companies, he said.
And the move will allow Arden, formally a closely held company, to
expand more aggressively with the infusion of money from PSEG Energy
Technologies, the unregulated subsidiary of Public Service Enterprise
Group, which has assets of $17 billion, Bolton said.
Before, the company’s business plan called for it to expand by using
its own money only, rather than going into debt.
Arden, whose services include HVAC construction and plumbing, process
piping and energy management control systems, has been a Pawtucket
fixture since 1954 and has been involved in projects ranging from T.F.
Green Airport to public schools locally. It has worked on projects
overseas, including a sewage treatment plant in Jordan. Until the early
1980s it operated an office in Puerto Rico.
But in 1986 Bolton – who had been its general manager since 1969 –
and Vice President Carmine Puniello bought the company assets, and the
company shifted its focus. No longer would it aggressively seek overseas
projects. Local jobs took precedence.
“We made a determined effort to stay much closer to home,” Bolton
said. “It was my feeling that our more profitable jobs have always been
within 50 miles from the office, and the least profitable jobs more than
(that).”
Since 1986 – when a number of layoffs took place – the company has
grown from a $7 million to a $34 million business, Bolton said. Bolton,
his son Robert M. Bolton, and Puniello will stay on as company managers.
They have leased their Pawtucket building to PSEG for five years, with
an option for an additional five years, Robert H. Bolton said.
“The anticipation is that we would always be headquartered in Rhode
Island,” he said.
Cassidy, whose company also provides services to help companies use
energy more efficiently, said wise use of energy is becoming
increasingly important as energy deregulation takes place, making the
market for energy more complex.
He added that energy prices in New England are higher than other
parts of the country because of heavy investments into nuclear power in
the 1970s that, in hindsight, were bad moves. New England’s distance
from natural gas sources, which are primarily in the Persian Gulf and
Texas, is also a factor.
The acquisition of Arden is the company’s first New England purchase,
and will help it expand its services throughout the Northeast, Cassidy
said.
One of the factors that sold Arden on the deal is that PSEG is
committed to union construction, Bolton said. He noted that all of
Arden’s projects are union jobs, and that all of his employees – other
than management – are members of various plumbing and pipe-fitting
unions.
“We find that the craftsmen that are available are much more educated
coming from the union side.as a group they (show) much better
workmanship than other groups we’ve been associated with,” he said.
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