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Primoris Units Win $155M Contract

Zacks Equity Research

Two units of Primoris Services Corporation (PRIM) – James Construction Group and Rockford Corporation, have secured new contracts worth $155 million. The deals cover pipeline and highway infrastructure projects throughout the continental U.S.

Acquired in 2009, James Construction Group is a unit of the East Construction Services segment of Primoris. Its Heavy Civil group has been awarded projects worth $55 million for the construction of highway and transportation infrastructure in Louisiana and Texas. The project is expected to continue through 2015.

Another unit, Rockford Corp., which is part of the West Construction Services segment of Primoris, received three pipeline construction projects worth $100 million in Pennsylvania, Texas and West Virginia.

Of the three projects, the construction of the 100-mile pipeline of the Seaway system in Texas has the maximum volume of work involved. The Seaway Crude Pipeline Company is a joint venture between Enterprise Products Partners, LLC, and Enbridge, Inc. The Seaway system includes a 500-mile long, 30-inch diameter pipeline between Cushing, Oklahoma and Freeport. The construction work is scheduled to start in the third quarter of 2013 and will be concluded during the first quarter of 2014.

The second project involves 2 miles of 24 inch diameter HDPE (High Density polyethylene) water line. In addition, the third project involves 3.9 miles of 12 inch diameter gas pipeline in Pennsylvania. Both the projects started in the third quarter of 2013 and should be completed by the end of the year.

Dallas, Tex.-based Primoris is a specialty contractor and infrastructure company which serves diverse end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.

Primoris remains optimistic about its business lines as it sees ample prospects for continued growth across end markets. Improvement in the U.S. energy infrastructure will drive growth. In addition, the company believes that industrial and water end markets are poised for significant growth in the coming years.

Primoris currently retains a Zacks Rank #3 (Hold).

Other stocks in the building and heavy construction industry with favorable Zacks rank are China Railway Construction Corporation Limited (CWYCY), Hopewell Highway Infrastructure Limited (HHILY) and MasTec, Inc. (MTZ). While China Railway holds a Zacks Rank #1 (Strong Buy), both Hopewell Highway and MasTec carry a Zacks Rank #2 (Buy).

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