Fluor Buys Control of Asbestos Removal Company

In its first acquisition since undergoing a major restructuring last year, Fluor Corp. announced Tuesday that it has bought a majority share of SOS International, a privately held asbestos removal firm based in San Francisco.

SOS had revenues of $60 million in 1987 and is among the top three asbestos removal firms in the country, according to Richard Maslin, a spokesman for Fluor.

Fluor said it has an option to buy the remainder of the company at a future date but would not say how much it paid for its stake in SOS, which Fluor hopes will provide an entry into the growing asbestos removal market.

The purchase was financed from a pool of $469 million in cash that Fluor had amassed by the end of last year in a restructuring that shed much of the firm’s mineral holdings and returned it to its origins as an engineering and construction firm.

Vince Kontny, president and chief executive officer of Fluor Daniel, the corporation’s principal construction subsidiary, said in a prepared statement: “This combination adds the nationwide presence and technical knowledge of SOS in asbestos abatement to Fluor Daniel’s full range of engineering and construction services.”

The U.S. market for asbestos removal is expected to grow to at least $100 billion over the next 20 years, Maslin said. The Environmental Protection Agency has estimated that unhealthful levels of asbestos is contained in 700,000 public and commercial buildings.

All of those will eventually need to undergo treatment for asbestos removal, Maslin said: “Just about every structure built in the 1960s contains asbestos for insulation and fire proofing.”

Analysts also noted that SOS represents a modest niche acquisition for Fluor. “Given the fact that Fluor’s revenues were $3.9 billion in 1987, acquiring a company with $60 million in revenues is not that significant,” said Thomas Samuelson, an analyst with Duff & Phelps in Chicago.