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Aegion Unit Wins $16M Contract

Zacks Equity Research

Insituform Technologies, LLC – a unit of Aegion Corporation (AEGN) – has secured a contract from the City of Baltimore, Md. worth $16 million. As per the deal, Insituform will use CIPP technology to restore and reconstruct the wastewater pipeline throughout Baltimore City.

Insituform, a global leader in the development and installation of proprietary technologies and services for repairing sewer, water and other underground piping systems, will install over 170,000 feet of Insituform cured-in-place pipes (CIPPs). According to the agreement, Insituform will fix the small and medium diameter CIPP in wastewater pipelines mainly in the northern and eastern parts of Baltimore city.

However, about 30% of the project, including manhole and lateral rehabilitation, spot repairs and restoration, will be executed by minority subcontractors. These local subcontractors are certified by the Maryland Department of Transportation. The project is expected to begin in the third quarter of 2013 and will be complete after 16 months.

Counting the above-mentioned deal, Insituform has received contracts totaling $46.4 million from Baltimore City since Dec 2012. Recently, it was awarded a contract from the City of Dallas, Texas, of about $5.6 million to provide high-quality rehabilitation solution through the installation of CIPP.

Aegion, which competes with USG Corporation (USG), Armstrong World Industries, Inc. (AWI) and James Hardie Industries plc (JHX) in the building and construction industry, expects to balance the slow start of 2013 with its strong backlog and robust bid table supporting opportunities for securing additional projects. Moreover, the Brinderson acquisition is part of its strategic efforts to enhance its presence in the US energy market.

Chesterfield, MO-based Aegion is a diversified building and construction company which provides infrastructure protection, proprietary technologies and services. It also offers services related to the rehabilitation and improvement of sewer, water, energy and mining piping systems.

Aegion currently carries a Zacks Rank #1 (Strong Buy).

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