Monadelphous moves into US

Investors have welcomed news that engineering and contracting firm Monadelphous Group has teamed up with a family-owned company in the US to target work in the shale gas industry.

Monadelphous has established a jointly-owned company with Mascaro, a contractor based in Pittsburgh with civil construction experience in the north-east of the US.

Mascaro has annual revenue averaging $US300 million, according to the company's web site, with 125 full-time professional staff and a field workforce that fluctuates between 250 and 600.

That makes it much smaller than Monadelphous, which had revenue of $1.8 billion in FY15 and finished the financial year with 4,536 staff.

The new jointly-owned company, named Monaro, will deliver ‘multidisciplinary construction services’ in the Marcellus and Utica gas regions of north-east US, targeting work for the gas, energy and chemical processing industries.

US-based Bob Santillo has been appointed chief executive of Monaro, having spent over 40 years in the construction services sector.

The move into the US follows a concerted push in recent years by Monadelphous to win more work in the oil and gas sector in Australia, to complement its traditional focus on mining. 

Nearly half of Monadelphous's FY15 revenue came from the oil and gas sector.

Monadelphous managing director Rob Velletri said the establishment of Monaro was a key milestone in the company’s growth strategy to enter overseas markets.

“Monaro gives Monadelphous a strong entry into the US gas market,” Mr Velletri said.

“Our partner, Mascaro, has a similar organisational culture to Monadelphous, and the combined skills and capabilities of our two businesses will allow Monaro to deliver multi-disciplinary construction services.”

As well as expanding to the US, Monadelphous has signalled its intention to pursue opportunities in PNG and Mongolia, and pursue global opportunities for its Chinese fabrication business.

Monadelphous closed 7.9 per cent higher to $7.51 per share.