Engineering firm buys cleanup outfit

Monday, April 14, 2008

BY JOEL BERG

For The Patriot-News

A midstate engineering firm known for its work with municipalities is expanding its territory and services with the purchase of another local company specializing in environmental cleanup projects.

Herbert Rowland & Grubic Inc., which counts Susquehanna Twp. and West Hanover Twp. among its clients, bought Alliance Environmental Services Inc. in a deal that closed March 31.

The sale will allow Herbert Rowland to offer service outside Pennsylvania, said Robert C. Grubic, president of the firm. Based in Swatara Twp., HRG has eight other offices around the state. Grubic would not disclose the terms of the transaction.

Grubic said that the firms have worked well together on projects and that it made sense for HRG to be able to offer the kind of environmental services that Alliance provides.

"They're becoming more and more of an important component of most of the projects that we do," he said. "The advantage to us of acquiring Alliance is they already had a very solid foothold in the market."

Alliance will keep its office in Susquehanna Twp., and no layoffs are planned at either firm, Grubic said. Alliance will also keep its name.

Paul Nachlas, who was president of Alliance, said the sale is a way of building a stronger business.

"Alliance was a good thing," said Nachlas, now a service group manager. "This deal was an opportunity to accomplish great."

Among Alliance's local projects was ensuring that contaminated soil was properly removed from the old Murata Electronics North America site in Carlisle before the property's transfer to the Capital Region Economic Development Corp. Alliance also investigated the soil around Harrisburg Steam Works Ltd. in 1996 for contamination before the firm's transfer to a national energy provider, according to the firm's Web site.

Nachlas, like Grubic, said joining the companies provides a way to offer a fuller range of services.

Steve Gido, a principal at ZweigWhite, a Chicago-based firm that provides advisory services to the engineering sector, agreed that clients are increasingly looking for firms that can handle all their needs.

"It's just too hard to use three or four different vendors," Gido said.

Engineering firms in Pennsylvania are also looking to buy counterparts in faster-growing states to the south and west, Gido said. In 2006, for instance, Pittsburgh-based Michael Baker Corp. bought Buck Engineering in Cary, N.C.

As the economy sours, mergers and acquisitions could taper off, Gido said. He expected to see about 180 deals nationwide this year, down from around 210 last year.

"Those firms that do residential and commercial development are really getting hit hard across the country," he said, adding that the housing bust is also hurting municipalities, which are collecting less tax revenue and are thus less able to afford public projects.

Grubic said the economy played a role in HRG's purchase of Alliance. He said the diversity of the firm's work should insulate it from any slowdown.

The deal is the second for Herbert Rowland. In 2004, the firm purchased Hickory Engineering in western Pennsylvania, Grubic said.

It is also the second deal announced this month involving local firms. Last week, Benatec Associates in Fairview Twp. and its sister company, Harrisburg-based Epsys, said they had been sold to a Maryland firm, Century Engineering.

ABOUT THE COMPANIES

Herbert Rowland & Grubic Inc. Headquarters: Swatara Twp. Year founded: 1962 Top executive: Robert C. Grubic, president Number of employees: 285 Annual revenue: $32 million Alliance Environmental Services Inc. Headquarters: Susquehanna Twp. Year founded: 1995 Top executive: Paul Nachlas, president Number of employees: 11 Annual revenue: $2.2 million