American Environmental Group will be integrated into Tetra Tech’s Remediation and Construction Management (:RCM) segment. This segment provides a wide array of services like program management, engineering, procurement and construction, construction management, and operations and maintenance focused on federal construction, environmental remediation, including unexploded ordnance (:UXO) and wetland restoration, energy projects such as wind, nuclear engineering and other alternative energies, and communications development and construction.
In fiscal 2011, the RCM segment contributed 22.9% to the total revenue and now with the inclusion of American Environmental Group, Tetra Tech expects to generate an additional $50 million in revenues. However, this acquisition is expected to be dilutive to fiscal 2013 earnings by roughly 1 to 2 cents.
With an employee strength of more than 500 and revenues of about $95 million, American Environmental Group provides environmental, design, construction, and maintenance services to solid and hazardous waste, environmental, energy, utility, and other industrial clients.
Management at Tetra Tech expects this acquisition to provide facilities and services in the area of engineering, procurement and construction. The primary clients that will be served under this are landfill operators as well as mining and power clients that face specialty disposal challenges.
This acquisition is in line with Tetra Tech’s acquisition policy. In fiscal 2012, the company made acquisitions that enhanced its service offerings and expanded the geographic presence of the Engineering and Consulting Services(:ECS) and Technical Support Services (TSS) segments.
Tetra Tech currently has a Zacks #3 Rank (Hold). One of the company’s competitors Progressive Waste Ltd. (BIN) also has a Zacks #3 Rank.
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