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Pittsburgh Business Times - October 20, 2003

ATS set to acquire Chester Engineers from USFilter

Deal will create one of nation's largest minority-owned engineering companies

Suzanne Elliott

O'HARA TOWNSHIP -- Advanced Technology Systems Inc., an engineering and scientific consulting firm in O'Hara Township, is in the process of acquiring USFilter Chester Engineers Inc., the region's second-largest engineering firm, sources close to the deal told the Business Times.  

What makes this deal significant is that not only is one of the region's largest engineering firms about to change hands, but it's about to be acquired by an African-American-owned engineering firm -- a transaction that will create one of the largest minority-owned engineering companies in the country.

ATS is owned by Robert Agbede, who started the company in 1987. Sources from both companies confirmed the pending deal, but declined to comment publicly. Mr. Agbede did not return several calls seeking comment.  

"We are always talking to people about assets," said John Lucey, executive vice president of USFilter for engineering and construction. He said if the company had anything to disclose, it would do so. Mr. Lucey is US Filter's top official in Pittsburgh.

A source familiar with the deal said employees of ATS and USFilter Chester Engineers have been told about the pending deal, which is expected to be completed later this month. The financial terms have not been made public. But a source said the transaction is being financed by local commercial lenders and Mr. Agbede.

Chester Engineers, which is based in Moon Township, was once part of DQE Inc., the parent company of Duquesne Light Co. DQE sold its engineering business in 1997 to Palm Desert, Calif., conglomerate U.S. Filter. DQE received U.S. Filter stock valued at $42.9 million and $400,000 in cash.

USFilter is part of French-owned Veolia Environnement and provides water services to nearly 14 million people in more than 600 communities, as well as thousands of industries and businesses.

It had sales last year of $4 billion and employs 15,000 in North America at 700 offices, plants and factories.

USFilter specializes in water and wastewater treatment projects, as well as civil engineering. Clients of the USFilter Chester Engineers, which employs 120 people in Pittsburgh and had local billings of $150 million in 2002, include ALCOSAN, Pittsburgh Water and Sewer Authority and IBM.

ATS, meanwhile, has a strong engineering presence here in Pittsburgh. The company employs 75 people. Its services include water resources management, geotechnical and site design, as well as construction management and inspection. It has done business all over the world. Its clients include Alcoa, the Allegheny County Airport Authority, Michigan Recovery Systems, Ben Gurion University in Tel Aviv, Israel, NASA, the city of Knoxville and the Urban Redevelopment Authority of Pittsburgh.

A source said ATS is presently the largest African-American-owned engineering company in Pennsylvania. When this deal is completed, it will be one of the largest minority-owned engineering firms in the country.

"ATS is great company," said Mulugetta Birru, executive director of the URA, the city's redevelopment arm. "They have done work with us at SouthSide Works, Station Square and they have been involved in the convention center. I have watched them grow to be a strong company. I don't view them as a minority company. I see them as a good company."

"Advanced Technology Systems is probably one of the largest minority-owned engineering firms in our region," said Doris Carson Williams, president of the Pittsburgh African American Chamber of Commerce.