Engineering Inc - July/August 2018 - 46

MERGERSANDACQUISITIONS

Nontraditional Services
Fuel 2018 Deal-Making Surge
BY NICK BELITZ

o date in 2018, engineering firms large and small,
domestic and international, have contributed to a surge
in deal-making across the industry. The volume of
transactions as measured by the number of deals consummated globally over the last 12 months increased 7 percent
while the number of deals made just in the United States rose an
astounding 21 percent.
Not surprisingly, individual deals represent a broad crosssection of all the industry has to offer. Buyers snapped up firms
providing a range of services, including firms focused on civil
infrastructure, geospatial technologies, power transmission,
structural engineering, mechanical, electrical and plumbing services and environmental consulting.
Recently, ACEC Member Firms also ventured further afield
from traditional engineering disciplines and made acquisitions of
planning firms, architecture firms and landscape architecture firms.
ACEC Member Firms have increasingly chosen nontraditional
services as a centerpiece of the deals.
Consider the following from ACEC Member Firms just in the
last several months:
* Thornton Tomasetti (New York) acquired of MFD (Romsey,
U.K.), a security consultancy specializing in physical, operational and technical security analysis and design.
* Treadwell Franklin Infrastructure Capital (New York)
acquired ACEC member James W. Sewall Co. (Old Town,
Maine), a provider of engineering, surveying, geospatial and
natural resource services. As part of the deal, Treadwell Franklin also acquired control of E4Research.org, a nonprofit
research and development corporation.
* Intertek (London) acquired Proasem (Bogota, Colombia),
a provider of laboratory testing, inspection, metrology and
training services.
This, combined with other recent
deals from big-name firms, indicates
Deals
industry decision-makers are pursuing
400
nontraditional offerings when expanding via acquisition. Other examples
include IBI Group's acquisition of
GreenOwl Mobile (Ontario, Canada),
350
341
a firm that deploys technology solutions
for transportation authorities, cities,
municipalities and private media corporations. Also, Parsons (Pasadena, Calif.) 300
acquired Polaris Alpha (Colorado
Springs, Colo.), a technology-focused
provider of mission solutions for com250
plex defense, intelligence and security
2014

customers, including the U.S. government. Finally last year, SNCLavalin (Montreal) expanded into digital asset management with
the acquisition of Data Transfer Solutions (Orlando, Fla.).

All together, these deals point to a trend that increasingly puts
engineering firms in businesses that are at best loosely related to
traditional engineering services. The reasons for this trend vary,
of course, but based on Morrissey Goodale's experience as consultants and advisers to the industry, we can pick out two main
drivers at work globally right now:

1. New technologies are threatening traditional ways of
doing business. Any job that can be broken down into dis-

crete, repeatable tasks can and will be automated as computers
identify patterns in data and use algorithms to build predictive
models. That includes engineering design. Forward-thinking
firms are looking for ways to add value for clients beyond the
traditional design process and that includes investing in niche
technology service providers.
2. Decision-makers are responding to market trends. We've
heard many conversations (and even a few loud complaints)
about the commoditization of the engineering profession and
services over the years. Engineering firm clients expect rock
bottom pricing for projects they view as routine and seem to
demand more for less each day. Firm leaders have two basic
options in this environment: adapt, diversify and respond to
the market; or whine and complain.
Recent data would suggest an increasing number of ACEC
members are choosing the former over the latter.
RECENT ACEC DEAL-MAKERS
MAY 2018
Partner Engineering and Science (Torrance, Calif.), an

ACEC member, acquired construction risk management firm

Global Deals

351

308

2015

2016

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TTM May 2018

http://www.E4Research.org

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