EMCOR Buys Siemens' Facility Services Business

BY ROBERT P. MADER Of CONTRACTOR’s staff

NORWALK, CONN. ¯ EMCOR Group Inc. has purchased Siemens’ U.S. Facility Management Services business as part of a strategic alliance between the two companies.

EMCOR and Siemens Building Technologies division will offer customers a combination of solutions for building controls, fire protection and security systems as well as mobile and on-site building operations, maintenance services and facilities management services.

“There are two separate agreements,” Frank T. MacInnis, chairman and CEO of EMCOR Group told CONTRACTOR. “We did acquire from them their facility services business, which is quite small and which they determined was non-core to their ongoing business, but it fits right in with ours. It is the acquisition of a number of accounts, typically long-term relationships with significant customers of theirs that they were intent upon keeping from a total building solutions and product standpoint, but that we could service better from a facility services standpoint.”

The two companies will swap customer lists, MacInnis said. Siemens Building Technologies wants to sell building control systems to EMCOR’s customers. Siemens is the designer, engineer and manufacturer of total building solutions, he noted, while EMCOR wants to take over the service every U.S. customer that has a Siemens building control system.

Will share responsibilities

On a new construction project, either firm could be subcontractor to the other. On a major retrofit, MacInnis said, Siemens would likely install the products and EMCOR would take over the maintenance and service of the system.

Siemens Building Technologies manufactures and markets building controls, and fire protection and security systems for civic, commercial and industrial properties, specializing in education, healthcare, government, and high-tech manufacturing facilities, as well as campus-style corporate complexes.

“For customers looking to outsource a broad range of facilities services, the Siemens-EMCOR alliance will be able to bundle the best and most comprehensive solution available,” said Stan Kunka, president and chief executive officer of Siemens Building Technologies Inc.

“A central feature of our long-term strategy is the aggressive growth of our facilities services business,” said MacInnis. “We are delighted to enter into this multi-level relationship with Siemens, one of the world’s premier companies. Through the just-completed acquisition and our broad strategic alliance, EMCOR and Siemens are committing the full range of our respective technical products and services offerings to manage the ever-increasing demand of facility owners and users for more reliable and cost-efficient performance.”

The acquired Siemens business provides facilities management services to more than 200 buildings in more than 18 states, representing approximately 45 million square feet of facilities and will supplement the approximately 950 million square feet of commercial and industrial facilities to which EMCOR Facilities Services currently provides similar services. EMCOR serves 25,000 individual facilities worldwide.

The Siemens operation generates approximately $53 million in annual revenues. EMCOR’s worldwide facilities services revenues are more than $1 billion. The acquired business employs 365 employees who will be integrated into EMCOR’s Facilities Services organization.

Multi-location clients

Among the major facilities management services contracts acquired are those covering multi-location sites for Fortune 100 companies in the information technology and telecommunications industries, as well as contracts with other Siemens operating units.

EMCOR will take over the service for a number of Siemens sites that had been handled by the facilities services division, so the firm will be both a customer and partner to EMCOR.

The customers may be serviced with a dispatched van, MacInnis said, but most of them have personnel permanently stationed on site at a large or sophisticated customer. MacInnis said EMCOR would simply transfer the personnel and responsibility for the accounts to itself, not unlike the process where it offers to hire a customer’s in-house personnel to maintain a facility.

“The outsourcing model for specialized services is really attractive,” he pointed out. “It was attractive during the recession and it’s attractive emerging from the recession for companies that want to control costs.”

A Fortune 500 company with more than $4 billion in annual revenues and 26,000 employees, EMCOR Group is a global leader in mechanical and electrical construction and facilities services.

Headquartered in Buffalo Grove, Ill., Siemens Building Technologies, Inc. is one of 14 Siemens operating companies in the U.S. and is a leading single-source provider of facility performance solutions. In North America, SBT employs 8,500 people and provides local service from more than 100 locations coast-to-coast.