Japanese group sees opportunities in telecom and power maintenance
TOKYO — Orix has bought a U.S. provider of maintenance for telecommunication, gas and power lines, aiming to position itself for a buildup in next-generation wireless networks and President Donald Trump’s infrastructure plan.
The Japanese financial services group purchased Peak Utility Services through a U.S unit for an estimated several hundred million dollars.
Founded in 2002, Peak offers infrastructure repair and upkeep services through 22 offices, mainly in Western U.S. states such as Washington and Idaho.
The U.S. has experienced an upswing in accidents owing to aging infrastructure in recent years. About $3.3 trillion in investment is needed in the nation’s gas, water, transportation and other works over the 10 years through 2025, but planned outlays fell short by about $1.4 trillion, the American Society of Civil Engineers said in a 2016 report.
The Trump administration has announced plans to invest about $1.5 trillion in infrastructure, with public-private partnerships expected to fill much of the gap.
Orix saw Peak’s telecom equipment maintenance business as well-placed to profit from investments by mobile providers like AT&T, as well Apple, Google and others in fast fifth-generation, or 5G, wireless networks, which are expected to reach market readiness next year.
The Japanese company has made four private-equity investments related to U.S. infrastructure since 2016, purchasing providers of road safety and water infrastructure upkeep services, among other companies.
It plans to merge similar businesses to give them greater scale before cashing out of these investments.