As a result of a strategic review process, Fluor Corp. is initiating plans to sell AMECO, its construction equipment rental company, as well as its government business. Fluor also intends to monetize surplus real estate and noncore investments, anticipating that these actions will generate more than $1 billion in aggregate proceeds.
Fluor evaluated its entire portfolio of businesses, including Stork, COOEC-Fluor Heavy Industries and Nu-Scale. Fluor concluded that the divestitures of select businesses will improve the financial stability of the company and allow the remaining businesses to refocus on engineering, construction and maintenance services in core markets.
“Together with our Board of Directors and outside advisors, we took an extensive and comprehensive look at our broader business to determine the best strategic path to return the company to consistent profitable growth,” said Carlos Hernandez, CEO of Fluor Corp. “The strategic direction we are pursuing as a result of this process builds upon Fluor’s premier competitive position in our core markets in which we expect to deliver sustainable growth, strong cash flow and attractive returns to investors. With this review behind us, we are focusing more than ever before on long-term value creation and operational excellence, and we remain dedicated to moving Fluor forward for the benefit of all of our stakeholders.”
The company said this renewed focus should result in a strengthening of the balance sheet, improving the company’s credit rating and ensuring adequate liquidity for ongoing operations.
The results of the operational review led to key leadership changes, the development of improved pursuit criteria and a new organizational structure. The company will shift to a model in which business groups have direct control over the functions that support operations. These actions are expected to improve the speed of decision making and drive greater accountability within the businesses. As a result of these and other changes, the company anticipates overhead reductions of $100 million.
In terms of equipment rental, AMECO has a unique business model focusing on international products, often but not exclusively providing equipment for Fluor construction projects. In addition to equipment rental, AMECO performs a wide range of site services and fleet management services.
Greenville, S.C.-based AMECO is No. 15 on the RER 100.
