Pike Electric Inc., a subsidiary of Pike Electric Corp. (Mount Airy, North Carolina, U.S.), is acquiring substantially all of the assets of Shaw Energy Delivery Services Inc. (EDS), an affiliate of The Shaw Group Inc. (Baton Rouge, Louisiana, U.S.). EDS, a division of Shaw's Power Group, is a provider of engineering, design, procurement and construction management services for T&D power lines and substations. In addition, EDS performs maintenance and construction services on T&D power lines and substations. In 2007, EDS generated approximately US$108 million in revenues.

According to H. Steve Morrison, Shaw EDS vice president of business development, The Shaw Group's Power Group is experiencing rapid growth in the nuclear and fossil plant design, construction and maintenance. Management of this growth consumes a great deal of management time and company resources. That, combined with synergies that were expected but did not materialize between EDS and the rest of the Power Group, caused The Shaw Group management to believe that EDS would be better off being a part of a company devoted to growth in the T&D business, said Morrison.

“While the transmission and distribution market has become nonstrategic for Shaw, we are pleased that Pike Electric will acquire EDS, which will enable them to offer best-in-class substation engineering and construction services,” said J.M. Bernhard Jr., Shaw's chairman, president and CEO. “With this divestiture, Shaw's Power Group will better focus on its core service offerings as the premier provider of engineering, procurement, construction and maintenance services for power-generating facilities.”

For Pike Electric, the EDS Engineering Group and Substation Group bring capabilities that do not exist at the company. The addition of the EDS business will enable Pike to offer customers full service for the engineering, procurement and construction of distribution, transmission and substation assets.

EDS brings a talented transmission, substation and distribution workforce already located in Pike's present service territory, and this acquisition will give Pike the opportunity to expand its operations into the West Coast, Southwest, Pacific Northwest and Mid-Atlantic markets.

“We are very excited about the acquisition of EDS, as it represents a compelling growth opportunity for Pike,” said J. Eric Pike, chairman and CEO of Pike Electric. “EDS's engineering, procurement and substation construction capabilities will serve as an ideal platform to pursue new business opportunities, serve new customers and enable us to offer a broader range of services to our existing customers.”

The transaction is expected to be completed in early August. Between now and then, Shaw will be reviewing all its existing contracts to determine the necessary steps to transfer ownership to Pike. Following the closing of the acquisition, Jim Hicks, the current president of EDS, will continue to manage the engineering and substation businesses.