Engineering Inc. - May/June 2019 - 70

MERGERSANDACQUISITIONS

Torrid Pace of Deal Activity Continues in 2019
BY NICK BELITZ

C

oming off a record year of industry deal-making in
2018, the first quarter of 2019 saw a continuation
of the torrid pace of merger and acquisition (M&A)
activity. Overall, buyers struck 81 deals involving a
U.S.-based seller in the first quarter of 2019. That level of activity
almost matches deal-making in the first quarter of 2018 when
buyers announced 82 deals. While the number of global deals
made during the first three months of 2019 declined slightly
from the previous year, both global and domestic industry
transactions in the first quarter of 2019 represent notable
increases in the number of deals announced over the same time
periods in 2015, 2016 and 2017. This would indicate we have
another year of robust-possibly record-setting-deal-making
ahead.
Looking back to transaction volume over the last 12 months,
the industry tallied 382 deals globally, up 7.3 percent from
the 12-month period ending Q1 2018. Deal-making has been
particularly strong in the U.S., with the 289 deals consummated
over the last four quarters, representing a 15.1 percent increase
U.S. Q1 Deals
100

82

81

2018

2019

70
50

2015

51

48

2016

2017

Global Q1 Deals
Deals

150

111
100

95

81

101

71

50

0

70

1. We have robust M&A across a variety of industry
sectors. ACEC members have made acquisitions across

a range of markets and corresponding services. Multiple
deals targeting geotechnical services took place during the
quarter, including Gannett Fleming's (Camp Hill, Pa.)
acquisition of geotechnical firm SAGE Engineers (Roseville,
Calif.) and RESPEC's (Rapid City, S.D.) purchase of Mine
Development Associates (Reno, Nev.). In addition, both
vertical engineering and horizontal infrastructure have
continued to be of high interest to buyers, with notable deals
including Thornton Tomasetti's (New York) acquisition
of Becker Structural Engineers (Portland, Maine) and
DLZ's (Columbus, Ohio) purchase of Johnson & Anderson
(Waterford Township, Mich.). Continuing a theme from
2018, demand for nontraditional services remains elevated.
Notably, in March, NV5 (Hollywood, Fla.) announced the
acquisition of The Sextant Group (Pittsburgh), a provider
of audiovisual, information and communications technology,
acoustics consulting and related design services.

2. Private equity buyers continue to outpace public buyers.

Deals

0

over the preceding 12-month period. Truly, the appetite for
M&A for firms in this industry has never been stronger. Below
are additional takeaways from the latest data:

2015

ENGINEERING INC.

2016

MAY / JUNE 2019

2017

2018

2019

Private equity firms continued their aggressive push into
the industry in Q1 2019, further widening their lead over
publicly traded industry firms in terms of the number of
deals. Nearly one-fifth, or 19 percent, of deals struck during
the quarter were PE-backed while just 9 percent of deals were
made by publicly traded buyers. Of interest is the fact that
this gap has widened substantially over the last year-in the
first quarter of 2018, private equity buyers notched 23 percent
of deals compared with 19 percent for publicly traded buyers.

3. Recent PE activity presents a case study of
buy-and-build in the Southeast and Southern U.S. Two

examples of acquirers using the "buy-and-build" strategy
employed by many private equity firms are CONSOR
Engineers and Ardurra-King. Earlier this year, CONSOR
Engineers announced the creation of a national transportation
and infrastructure engineering brand via the consolidation
of four regional leaders: Target Engineering Group (Coral
Gables, Fla.), Infrastructure Engineers (St. Cloud, Fla.),
Johnson-Adams & Associates (Plant City, Fla.) and AIA
Engineers (Houston). The move echoed that of ArdurraKing, which formed in 2017 when King Engineering
(Tampa, Fla.) merged with Ardurra Group (Metairie, La.).
In November of last year, the engineering company, which
by then included eight firms, rebranded as Ardurra Group
and has since acquired another firm. Critically, we note that
both CONSOR and Ardurra are backed by private equity
firms. With so many types of buyers-private equity, publicly
traded and strategic-active in the marketplace in 2019 and
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