Stockholders of ERC International Inc. of Vienna, Va., yesterday approved the acquisition of International Energy Associates Ltd. (IEAL), a Washington-based consulting firm, in a stock swap worth about $3.4 million.
The merger is expected to enhance ERC's overseas business. IEAL, a privately held company, has ties with firms in Japan, West Germany and Australia. As part of the merger, IEAL Chairman John E. Gray will join ERC as its president. Jack E. Aalseth, the current president, will become chairman and chief executive officer.
Gray, who has served on the ERC board since 1978, will bring with him several IEAL executives. They include Hilliard W. Paige, vice chairman of IEAL, who also is chairman of H. A. Knott Limited Inc., a Silver Spring contracting firm, and a former president of General Dynamics Corp. Paige was elected yesterday to the ERC board of directors.
Other IEAL executives who will move to ERC include IEAL President John C. Young, former president of the custom systems division of Computer Sciences Corp., and IEAL Vice President Myron B. Kratzer, a former deputy assistant secretary of State for nuclear energy and technology affairs.
The acquisition will be financed by swapping 2.35 shares of ERC stock for each share of IEAL, or a total of 650,000 shares of ERC stock. ERC shares, which have declined 14.6 percent in the last four weeks, closed yesterday at $5.25.
Gray, a former president of NUS Corp. of Gaithersburg and an internationally known energy consultant, owns 30 percent of IEAL's common stock and will receive 192,000 shares of ERC stock, worth more than $1 million at yesterday's closing price. Paige, the second-largest IEAL stockholder, will receive 109,000 ERC shares, worth about $572,000. Alan S. Parsow, an Elkhorn, Neb., investor whose fund has bought more than 11 percent of the stock of ERC, voted in favor of the merger. Parsow has been seeking a seat on ERC's board and has applied for a government security clearance, which is required to become a director.
Aalseth said Parsow's proposed election to the board probably wouldn't come up until next year. Aalseth, who has expressed doubts about Parsow's election before, said the company had "no position" on Parsow's request.