Johnson Controls Buys Berg Inc.
“The company will operate just as it has,” said James Mylett, regional vice president of Johnson Controls' service and solutions. “We've gained some real talent with this acquisition so key employees will be staying and we will continue to serve the same customer base.”
The Berg name will continue to exist as “a strong, local brand,” according to Mylett, but will operate as a part of Johnson's Service & Solutions Division.
Bob Hamm, former Berg president, has become district general manager. (Hamm's brother, William, served as president of the Mechanical Contractors Association of America in 1982.)
Berg Inc., Shreveport, La., was founded in 1929 by Chris H. Berg as the Shreveport Plumbing Co. The company currently provides HVAC and plumbing services for commercial and industrial customers throughout Louisiana, east Texas and southern Arkansas. Specific terms of the agreement were not released.
The last time Berg was listed on PM's Pipe Trades Giants, an annual ranking of the country's largest plumbing and piping contractors, was in 2002 at No. 81.
The deal may seem like an odd mix for a manufacturer, not to mention small potatoes for a company this size. Johnson Controls, Milwaukee, Wis., has operations around the world that rung up $27.9 billion in sales last year, largely from the automotive systems and building controls markets.
The Berg deal, however, is a definite part of Johnson Controls' plan to grow its service business.
Two years ago, the company bought Cal-Air Inc., one of the country's largest air-conditioning contractors. At that time, Johnson Controls executive Alex Molinaroli, vice president and general manager of the company's Controls Group-Americas, said the company intended to double its service business in three to five years.
In announcing the Cal-Air deal, Molinaroli pegged the country's commercial mechanical service market at $53 billion.
“We're not buying [Cal-Air] in order to be a mechanical contracting company,” he told The ACHR News in a May 2005 edition. “If we do buy, it's to be the premier mechanical services provider in the commercial market.”
With the Johnson name so well known in the controls business, Molinaroli added that the company's plan was, in part, to build its mechanical services by leveraging its global resources with a mechanical contractor's local service delivery.
“We need to provide the services customers have always wanted and do it well,” he added. “That means performance contracting, energy contracting and outsourcing. We have the scale to do it and do it properly.”
Johnson Controls also bought a smaller outfit in April 2005 - Pro-Tel Inc., a mechanical services contractor based in Waukesha, Wis.
While the Cal-Air deal certainly caught attention in the United States, Johnson Controls has made such acquisitions before overseas. In 2001, the company bought MC International, at the time a $200 million French refrigeration and air-conditioning service provider for retail and industrial/commercial customers throughout Europe.
Of course, no Johnson acquisition story would be complete without recapping last year's $3.2 billion purchase of York International Unitary Products Group. At the time, York's annual revenue was estimated at $5 billion and would become a part of Johnson Building Controls Efficiency Business, which generated $5.7 billion in 2005.
One benefit of the combination of the new companies was expected to be a further offering to customers of a bundle of HVACR equipment and controls.