Baton Rouge-based Arkel International, an industrial and infrastructure services company, has acquired AED Stratecon, a Maryland-based engineering, asset and facilities management firm with an expertise in the U.S. government intelligence and classified market space.
Terms of the deal were not disclosed, but Arkel CEO John Moore says the acquisition is significant because it will help grow Arkel’s government sector work, particularly in the narrow niche of highly classified projects.
“In the government world, there is full and open-type work and there is classified work, which is very pinpointed and requires special clearances for your facility and your people,” Moore says. “Having that clearance [through this acquisition] gives us access to new markets and opens up the door for us to do more international work.”
An estimated 50% of Arkel’s $100 million in revenues this year will come from government work, Moore estimates, while the other half will come from commercial clients.
On the government side, Arkel does a lot of work overseas for the U.S. State Department. It also serves as a subcontractor for KBR, which has multiple contracts with the U.S. Department of Defense, among others.
Among Arkel’s commercial clients are large, integrated petrochemical companies, for whom it does construction work overseas, as well as domestic clients like Cheniere Energy, whose LNG facility in Sabine Pass is currently being worked on by Arkel.
Unlike a larger industrial construction company, Arkel’s niche is in what Moore describes as the “balance of plant” type of work—building and maintaining the systems and components that support plant operations, though not energy production.
“We are doing the capital projects in support of the support functions,” Moore says.
In general, the projects the company does range from $5 million to $25 million, he says.
Arkel had been tracking AED Stratecon for a couple of years prior to the recent acquisition and Moore says the synergy between the two firms will expand the market aperture of both.
Arkel International was founded in 1955 by Homer Knost, whose son George Knost III, still owns the company and serves as president. It is separate from Arkel Constructors, owned by Johnny Fife, which grew out of Arkel International in the 1990s and was spun off as an independent company in the early 2000s.
