Jones Engineering acquired in €1bn-plus deal

Irish company Jones Engineering has been acquired by US group Cathexis Holdings in what is believed to be a deal worth more than €1 billion.

The group’s chairman and majority shareholder, Eric Kinsella, as well as chief executive Jim Curley, who is the company’s second largest shareholder, are to leave the company following the deal.

Over its 132-year history, the group has been led by just three people. Harry O’Neil guided the company from its founding in 1890 to 1947, before his apprentice Chris Jones took charge in 1948 and led the company until 1993. Mr Kinsella has led the group since then.

Jones Engineering is a global company that focuses on large-scale infrastructure projects in the pharmaceutical, healthcare, IT and data-centre industries. It generates about half of its revenue from overseas.

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The group employs 4,600 people. Latest accounts for Jones Engineering Holdings Ltd show it recorded turnover of €726 million in 2020, with a pretax profit of just under €60 million. The company paid a dividend of €35 million during the year.

In a statement announcing the deal, the company said it recorded a turnover in excess of €900 million in 2021.

Cathexis is a multi-strategy holding company based in Houston, Texas, with investments ranging from property and energy to private equity. Cathexis is the family office of the firm’s billionaire chief executive, William Harrison.

[ Jones Engineering chairman and his wife donate €30m to Trinity College Dublin ]

According to the Mass Investor website, Mr Harrison is a 30-something billionaire, whose father was the late Texas rancher and billionaire Bruce Harrison.

The Harrison family’s fortune was created in the early 1900s by William Harrison’s great-grandfather, oilman and land baron Dan Harrison.

William Harrison made LA property news when he purchased a $110 million (€102 million) Malibu home in 2018. He also purchased an 83,400-acre Colorado ranch that had been listed at $105 million.

The value of the investment in Jones Engineering was not disclosed, but in the context of the size of the company and other deals done by Cathexis, it is likely to be in excess of €1 billion.

Cathexis’s equity commitments range from $3 million for niche deals with high expected values, to more than $100 million for the purchase of established companies or financing infrastructure development.

It’s understood Cathexis tried last year to acquire the Jones business, but the approach was rebuffed.

Following that, the US company took a majority stake in another Irish group Leo Lynch, which is a specialist technical, mechanical and electrical engineering contractor that employs more than 200 people between its headquarters in Dublin and sites in Kilkenny and Kildare. It provides a range of services including design, project management and installation to blue-chip clients in the pharmaceutical, biopharmaceutical, medical devices, semiconductor and data-centre industries.

Cathexis has highlighted Europe as an investment target, with Leo Lynch providing the company with the opportunity to enter a specialist subsector of the construction market in Ireland. It gave the US company a foothold in the sector to tender for larger, more complex projects both domestically and internationally.

[ US investor takes majority stake in Leo Lynch ]

Leo Lynch’s work is predominantly in Ireland, although it has carried out some work overseas. The existing management of Leo Lynch have committed to stay with the business once the investment is completed.

Following the collapse of the Cathexis’s bid to acquire Jones Engineering last year, a number of senior executives left their roles with Jones to take up positions with Leo Lynch.

It’s understood talks between Cathexis and Jones Engineering about a possible takeover resumed in recent weeks, and a breakthrough followed.

In a companywide email on Friday, which has been seen by The Irish Times, Mr Kinsella and Mr Curley told staff at Jones Engineering of a “significant announcement” that would be made on Friday. They said they had been considering the future of the group “over the past number of months”, and that they had been seeking to “reduce our day-to-day involvement in the company”.

“We have selected Cathexis as the effective new owner for the business because they value our 130-year heritage and recognise the success of our group,” they said, adding it was the start of “a new chapter” for the company.

“It is the right time for Jim and myself to depart and allow a new owner lead the next phase of expansion and growth for Jones Engineering,” they said.

“The transaction will take some months to complete, Jim has agreed to stay on for a few months to help with the transition to a new management team.”

Together with his wife Barbara Kinsella, Mr Kinsella has previously made substantial gifts to Trinity College Dublin in the areas of student study facilities and engineering scholarships.