1145

TRANSACT IONS AEGION CORPORATION COMPLETES THE ACQUISI- TION OF UNDERGROUND SOLUTIONS INC. Aegion Corporation announced the completion of the acquisition of Underground Solutions Inc. , an innovative provider of proprietary fusible PVC technology for the rehabilitation of pressure pipelines. The company paid approximately $85 million to acquire Underground Solutions and separately paid $5.2 million for the discounted value of tax benefits associated with existing net operating loss carry forwards. The company funded the transaction with approximately $60 million in cash and the remainder borrowed through its revolving line of credit. The company expects contributions from Underground Solu- tions to be accretive to GAAP earnings per share in 2016 with estimated revenues of $50 million and operating margins in excess of 10 percent. Charles Gordon, Aegion’s president and CEO, said, “Underground Solutions’ patented PVC pipe and pipe fusing technologies, which uniquely complement our Insituform and Tyfo/

Take your advice from Mark Zweig to-go. Listen to this and past editorials from The Zweig Letter via the free TZL Podcast on Stitcher, iTunes and Soundcloud. zweiggroup.com/podcast

Fibrwrap customer solutions, will enable Aegion to further advance our strategy to expand in the trenchless pressure pipe rehabilitation market. We are especially pleased to have several key members of Underground Solutions’ senior management team, who average more than 20 years of industry experience, join Aegion. These individuals will form an expanded team within our Infrastructure Solutions platform dedicated to this promising end market.” Commenting on the acquisition, Frank Firsching, vice president and general manager of Underground Solutions, said, “We believe our products offer a distinct advantage to rehabilitate pipelines in water, sewer and conduit applications. We are excited to join Aegion and add our capabilities with their scale and market leading technologies to create a more effective and less disruptive alternative to significantly reduce water loss in aging pipeline infrastructure.”

MARK ZWEIG, from page 1

Just get your managers used to the idea of providing instant feedback to their employ- ees – both good and bad – as close to the incident as they can. It saves time and money and is much more effective. 2)Dump your fixed salary ranges. You aren’t a government agency. Stop trying to put people in boxes. Who says these ranges make any sense anyway? Where did they come from? How often are they adjusted? Why do you need them? People are all different even if they work in the same job category. 3)Change salaries for people as often as necessary. Once a year is not enough for re- ally young people unless you want them to be recruited away by your competitors. Give individuals a raise when they need it based on your assessment of their value to your enterprise. You don’t really need any set schedule. That is self-imposed. You know who is worth more than someone else. Pay them accordingly with no delay. 4)Implement an open book financial reporting system. Show everyone how much money the company is making or losing, where you stand on collections, working capi- tal, proposals, backlog, and more. Tie the bonus pool to the actual cash basis profitabil- ity. Set the percentage to go to the all-employee pool, the management/key person pool, and the owner pool each year as a part of your business planning process. Tell everyone what pools they participate in. 5)Start paying bonuses out monthly or quarterly. Once a year is way too long to wait. If there’s a loss, make up the loss before paying out any bonus monies. Let everyone see where the money is coming from based on the open book report. Pay the individual bonuses based on the employee’s salary as a percentage of total salaries of people who make up that pool. For example, if the company makes $150K cash profit for the month, and 20 percent of that goes to the “all employee” pool, that is $30K in bonuses to be paid that month. If an individual employee has 3 percent of the total salaries of those in the pool, he or she would get $900. You can disagree with me about how to pay people if you like, but I know what works over the long haul to attract, motivate, and reduce turnover. Doing these things makes life better. People will be happier. You’ll keep more folks as you’ll have some tools to keep them there. You’ll spend less time on it all. There will be more trust in management. People will better understand your business and feel the company is fair. And you’ll be encouraged to weed out the duds because they are getting bonus money they don’t deserve. All of this bodes well as it relates to improving the value of your enterprise – one of the primary objectives of an entrepreneurial venture. MARK ZWEIG is Zweig Group’s founder and CEO. Contact him at mzweig@zweiggroup.com.

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Megan Halbert | Design Assistant mhalbert@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com Tel: 800-466-6275 Fax: 800-842-1560 Email: info@zweiggroup.com Online: www.thezweigletter.com Twitter: twitter.com/zweigletter Blog: blog.zweiggroup.com

Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/yr.). $475 for one-year subscription, $775 for two-year subscription. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2016, Zweig Group. All rights reserved.

THE ZWEIG LETTER March 28, 2016, ISSUE 1145

Made with FlippingBook Annual report