Engineering Inc. - March/April 2015 - (Page 52)
Mergers and Acquisitions
By N e i l C h u r m a N
2014 a Record Year for Engineering M&A
T
he New Year marked
the end of one of the
biggest years ever for
industry mergers and acquisitions activity. The sheer
number of transactions among
engineering firms, as well as
the size and scale of the deal
making, was unprecedented in
numerous ways.
In 2014, we tracked 203
domestic deals (those involving a U.S.-based seller), which
set a new industry high-water
mark. This topped the previous record of 180 deals, set
in both 2008 and 2013, by
nearly 13 percent.
Beyond the remarkable
number of deals, last year saw
many of the largest transactions in our industry's history.
In the November/December
2014 issue of Engineering
Inc., we covered several megadeals, which were pervasive in
2014, and the trend has not
slowed down. Danish firm
Ramboll Group merged with
1,500-person ENVIRON of
Arlington, Va., in December. Early this year, HDR
announced its acquisition of
600-person Infrastructure
Corporation of America
(ICA). The strength of the
economy, coupled with growing corporate cash reserves and
soaring share prices, contributed to the boom.
In a statement, Ramboll
Group called North America
"the world's most attractive
market for consulting engineering services." This sentiment appears to have been
echoed by firms across the
globe. In 2014, there were 25
deals in which an international
buyer merged with or acquired
a U.S.-based firm-up from
17 the year before. The U.S.
market has proven to be a
destination for global firms, as
economies in Europe, Asia and
Africa continue to face challenges. It remains to be seen if
the recent decline in oil prices
will affect this momentum,
but the broader U.S. market
appears to provide some cushion to firms that are diversified
in their markets and services.
Within U.S. borders, firms
continued to expand into new
domestic markets. Last year,
114 deals involved two firms
based in different states, up
slightly from 111 in 2013.
This signals that U.S. firms
remain bullish on growth, as
they seek out new geographies
and end markets for expansion. We saw this figure dip
during the recession when
firms focused more on shoring
up their existing positions in
their current geographies.
In many ways, 2014 may be
hard to top in terms of industry M&A activity, but there do
not appear to be any signs of
consolidation slowing down.
As long as the U.S. economy
stays on the upswing-and if
oil prices can find their footing-we expect the pace of
deal making to continue, if
not ramp up, in 2015.
Recent ACEC Deal-Makers
January 2015
ACEC Member HDR
(Omaha, Neb.) acquired
Infrastructure Corporation
of America (ICA) (Brent-
wood, Tenn.), a transportation
engineering, asset maintenance
and management specialist,
and MEI, LLC (Pooler, Ga.), a
liquid natural gas consulting
firm.
ACEC Member Strand
Associates (Madison, Wis.)
acquired O'Malley Engineers
(Brenham, Texas), a provider
of civil engineering and surveying services.
December 2014
ACEC Member CP&Y
(Dallas) acquired ACEC
Member The Wallace Group
(Waco, Texas), an engineering, architectural, survey and
subsurface utility engineering
firm.
ACEC Member CDM
Smith (Cambridge, Mass.)
acquired The Louis Perry
Group (Wadsworth, Ohio), an
engineering, architectural and
design-build firm.
52
ENGINEERING INC.
MaRCh / apRIl 2015
ACEC Member DOWL
HKM (Anchorage, Alaska)
announced the addition of
Buckhorn Geotech (Montrose, Colo.), a civil, structural
and geotechnical engineering
firm, to its portfolio.
ACEC Member S&ME
(Raleigh, N.C.) announced
its intent to purchase ACEC
Member Littlejohn (Nashville, Tenn.), a planning, engineering and environmental
design firm.
ACEC Member Ayres
Associates (Eau Claire, Wis.)
entered into a letter of intent
to acquire SAA Design Group
(Madison, Wis.).
T
o view the most up-todate and "live" versions
of the M&A heat maps and
to see the buyers and sellers
in each state, go to
www.morrisseygoodale.com.
Watch the M&A Takeaway
video that accompanies
this article, presented
by Mick Morrissey at
www.morrisseygoodale.
com/ACECMergers/
MarchApril2015
Neil Churman is principal
consultant of Morrissey Goodale
LLC-a strategy, M&A and
human capital solutions firm
serving the A/E/C industry.
Churman, who is based in the
firm's Houston office, can be
reached at nchurman@
morrisseygoodale.com.
http://www.morrisseygoodale.com
http://www.morrisseygoodale.com/ACECMergers/MarchApril2015
http://www.morrisseygoodale.com/ACECMergers/MarchApril2015
http://www.morrisseygoodale.com/ACECMergers/MarchApril2015
Table of Contents for the Digital Edition of Engineering Inc. - March/April 2015
Engineering Inc. - March/April 2015
Contents
From ACEC to You
Market Watch
Legislative Action
Senator Orrin Hatch
Engineer-Elect
Breaking the Mold
App to Order
Making a Quality-of-Life Difference
Leading the Pac
2015 Annual Convention Preview
Guest Column
Business Insights
Members in the News
Mergers and Acquisitions
Engineering Inc. - March/April 2015
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