By Jane Duckwall
ERIC PIKE: DEALMAKER OF THE YEAR
Eric Pike has initiated and overseen multiple transactions since 1998, when he took the reins at the Mount Airy-based construction and engineering company started by his grandfather, Floyd Pike, in 1945 to serve the electric power industry. Those deals include a leveraged buyout in 2002 in which New York private-equity firm Lindsay Goldberg LLC gained an 85% stake; seven acquisitions between 2003 and 2012; an initial public offering in 2005; and another LBO, with New York-based Court Square Capital Partners, to return Pike Corp. to private ownership in 2014.
It’s the latter deal of which Pike says he’s most proud. The $668 million transaction made sense, he says, because the quarterly pressures of public ownership were not a good fit for Pike Corp. The company’s customers, which include Duke Energy and other investor-owned utilities, municipalities and power producers, hire the company for construction and maintenance of power lines and substations. Pike has 7,500 employees in 38 states. Revenue and profit fluctuate based on natural events, while major capital investments are required to maintain distribution lines and provide other services.
Going private took 18 months, a more complex process than an initial public offering, says Pike, who controlled about 10% of the company’s shares at the time of the sale. It required finding investors, negotiating terms, filing SEC paperwork and gaining shareholder approval. It also took some legal maneuvering to settle a lawsuit by a major shareholder, who accused Pike of selling the company at an inadequate price. “It’s almost a foregone conclusion that you’re going to be sued,” Pike says of go-private deals.
Shareholders received $12 a share, a 51% premium over the closing price on Aug. 4, 2014, the last trading day before the Court Square agreement was announced. Pike initially traded for about $16 in 2005, then topped $23 in 2007 before the recession. Utility-industry spending cutbacks caused Pike shares to decline to about $7 in 2011.
The latest leveraged buyout was followed by a restructuring plan to reduce costs, prompting a 40% increase in pretax profit during the 18 months after the sale, according to the company.
Pike, 48, got his start at age 15 as a line-crew member “during summers, winters, whenever there was a break” from school. He loved the work, he says. After graduating from Emory University in 1990 with a history degree, he continued working as a lineman, managing an overhead distribution crew. Eight years later, he’d worked his way to the top.
Chief executive officer Pike Corp., Mount Airy
Utility construction and engineering
COMPANY FOUNDED: 1945
NOTABLE: Pike’s pretax profit gained 40% since 2014 leveraged buyout
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