Japanese Firm to Buy Minority Stake in Dillingham Construction
NEW YORK (AP) _ Shimizu Construction Co. of Japan has agreed to acquire a minority stake in Dillingham Construction Corp., a subsidiary of privately-owned Dillingham Holdings Inc., according to The Wall Street Journal.
The Journal said in its Thursday editions that the move by Shimizu, Japan’s largest construction company, will likely pave the way for other Japanese builders considering U.S. acquisitions.
Neither Shimizu nor Pleasanton, Calif.-based Dillingham Holdings disclosed terms of the acquisition. But the newspaper quoted Tadao Komatsu, president and chief executive officer of SC-US Inc., the New York-based Shimizu subsidiary that is buying the stake, as saying Shimizu is providing minority financing for a management buyout of Dillingham Construction.
A new company will be formed, which will be majority-owned and managed by Dillingham’s current management and retain the Dillingham name, Komatsu told The Journal.
He said Shimizu and Dillingham Construction, which have cooperated on projects since the 1950s, are likely to intensify their collaboration - especially in the Pacific islands and Southeast Asia, where both companies have extensive operations.
Dillingham Holdings, which went private in a leveraged buyout in 1983, has been trying to sell Dillingham Construction for several months, a company spokesman told The Journal.
″We have experienced some of the same problems as the industry as a whole,″ said William Wilson, vice president for finance of Dillingham Construction. ″We’re not doing as well as we used to, or as well as we expect to in the future.″
Dillingham is the 15th-largest U.S. construction company as ranked by Engineering News Record magazine. It had revenue of $880 million in 1986, while Shimizu posted revenue equivalent to $7 billion, The Journal said.