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Archive for the ‘Engineering/Construction’ Category

M&A Quarterly News In The Engineering and Construction Industry Sector

By Peter Heydenrych | Sep 30, 2019

The report below gives a good overview of the third quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q2 2019 included 113 closed deals, according to data published by industry data tracker FactSet.

FirstService Corp acquired a 95% majority stake in Global Restoration Holdings LLC, a portfolio company of Delos Capital LLC, for US$505 million in cash. The acquisition would funded through FirstService Corp’s cash on hand, new term loan and credit facility. The transaction also includes Interstate Restoration Group, Inc. and FirstOnSite Restoration LP. The acquisition would expand FirstService Corp’s scale and capabilities in the property restoration sector and further complements its existing Paul Davis Restoration franchised and company owned operations. Founded in1998, Global Restoration Holdings is located in Texas and functions as an investment company whose subsidiaries engage in disaster restoration, reconstruction and renovation services.

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M&A Quarterly News In The Engineering and Construction Industry Sector

By Peter Heydenrych | Jun 26, 2019

The report below gives a good overview of the second quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q1 2019 included 83 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in February when Authority Brands, LLC, a portfolio company of Apax Partners (UK) Ltd, acquired Clockwork IP, LLC, a subsidiary of Direct Energy Services, LLC, ultimately owned by Centrica Plc, for US$300 million. Founded in 1999, Clockwork IP is located in Houston, Texas and provides residential heating and cooling, electrical and plumbing services.

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M&A Quarterly News In The Engineering and Construction Industry Sector

By Peter Heydenrych | Mar 21, 2019

The report below gives a good overview of the first quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q4 2018 included 61 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in October when MDU Resources Group, Inc. acquired Sweetman Construction Co, doing business as Concrete Materials Co, for an undisclosed amount. The transaction expands the construction materials business of MDU and is expected to be accretive to earnings per share. Following the transaction, Sweetman Construction and all its employees will become part of Knife River Corp, an MDU subsidiary. Sweetman Construction is located in South Dakota and provides construction materials. It employs around 260 people.

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M&A Quarterly News In The Engineering and Construction Industry Sector

By Peter Heydenrych | Dec 06, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q3 2018 included 97 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was closed in September when Infrastructure & Energy Alternatives, Inc. acquired American Civil Constructors, Inc., a portfolio company of Insight Equity Holdings LLC, for US$145 million. Included in the transaction is American Civil’s subsidiary Saiia Construction Co. LLC. The acquisition would expand Infrastructure & Energy’s capabilities in the engineering sector. American Civil Constructors is located in Phoenix, Arizona and provides construction services and supplies construction materials.

Housing starts in the US increased 1.5 percent from September to an annualized rate of 1,228 thousand in October of 2018, compared with market expectations of a 1.6 percent rise.

Industry Indicators

  • US corporate profits, an indicator of corporate demand for construction services, rose 7.7% in the second quarter of 2018 compared to the same period in 2017.
  • The value of US nonresidential construction spending, a demand indicator for heavy construction, rose 5.0% year-to-date in September 2018 compared to the same period in 2017.
  • US steel mill product prices, an indicator of commodity steel product costs used in construction, rose 18.2% in October 2018 compared to the same month in 2017.

Posted by Peter Heydenrych.

Read the Entire Engineering & Construction 4th Quarter Newsletter Here


M&A Quarterly News In The Engineering and Construction Industry Sector

By Peter Heydenrych | Sep 19, 2018

The report below gives a good overview of the third quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q2 2018 included 98 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in June when Gutridge Plumbing, Inc., a portfolio company of Kassel Equity Group, LLC, acquired Titan Electrical Construction & Design, Inc. for an undisclosed amount. The acquisition would enhance Gutridge Plumbing’s service capabilities. Titan Electrical Construction & Design is located in Ohio and provides electrical contracting services.

Building permits were on the rise in quarter, which bodes well for the construction sector. Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,311,000. This is 1.5 percent (±1.3 percent) above the revised June rate of 1,292,000 and is 4.2 percent (±1.7 percent) above the July 2017 rate of 1,258,000.
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M&A Quarterly News | Engineering and Construction Industry Sector

By Peter Heydenrych | Jun 28, 2018

The report below gives a good overview of the second quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q1 2018 included 81 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in March when TopBuild Corp acquired USI, Inc., formerly known as United Subcontractors, Inc., a portfolio company of Reinet Investments Manager SA and Trilantic Capital Management LP, for US$475 million in cash. Founded in 1998, USI is located in St. Paul, Minnesota and engages in the installation of residential and commercial products. It generated revenues of approximately US$375 million for the year ended 2017.TopBuild Corp. is an installer and distributor of insulation products.

Housing starts continued on an upward curve in the first quarter as the economy remains strong.
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M&A Quarterly News | Engineering and Construction Industry Sector

By Peter Heydenrych | Mar 26, 2018

The report below gives a good overview of the first quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q4 2017 included 86 closed deals, according to data published by industry data tracker FactSet.

One of the notable transactions of the quarter was announced in October when Lennar Corp acquired CalAtlantic Group, Inc. for US$6.1 billion in cash and stock. The transaction is expected to generate annual cost savings and synergies of approximately US$250 million, with approximately US$75 million achieved in fiscal year 2018. Based in Irvine, California, CalAtlantic Group, Inc. provides home building services.

As the economy strengthens, construction spending across all sectors has increased.

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M&A Quarterly News | Engineering and Construction Sector

By Peter Heydenrych | Nov 10, 2017

The report below gives a good overview of the fourth quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q3 2017 included 52 closed deals, according to data published by industry data tracker FactSet.

The nonresidential building market is expected to be among the weakest-performing segments of the overall US construction market over the next few years, according to a July 2017 forecast by ConstructConnect and Oxford Economics. US nonresidential building construction activity fell nearly 18% in the second quarter of 2017 compared to the same period a year earlier.

Second-quarter activity was particularly weak for retail and parking garage segments. Between 2017 and 2021, nonresidential building construction starts are forecast to see annual growth of less than 2%. While starts were weak in the second quarter 2017, construction projects in the manufacturing sector could be a bright spot moving forward amid low energy costs, technical expertise in competitive world markets, and pressure from the Trump administration to keep manufacturing jobs in the US. Manufacturing-related construction starts are expected to drop more than 11% in 2017, then rise more than 9% in 2018. After a slight rise in 2018, commercial starts are forecast to gradually decline through 2021, but institutional projects should see modest annual upticks in activity.

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M&A News From The Engineering & Construction Industry

By Peter Heydenrych | Sep 13, 2017

The report below gives a good overview of the third quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q2 2017 included 88 closed deals, according to data published by industry data tracker FactSet. The average transaction value was $81 million.

One of the largest deals of the quarter closed in April when Tallgrass Energy Partners LP acquired an additional 24.99% minority stake in Rockies Express Pipeline LLC from Tallgrass Development for US$400 million in cash. Rockies Express Pipeline LLC provides water, sewer and pipeline construction services.

The Trump administration has promised to spend on improving the condition of the United States’ infrastructure. New large infrastructure projects will certainly benefit the industry and could spur a flurry of M&A as larger companies look to acquire smaller companies to increase capabilities.

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Construction & Engineering Sector | M&A News

By Jeff Johnson | Feb 15, 2017

construction & engineeringNew US infrastructure projects such as repaving roads, shoring up bridges, and expanding busy highways with toll roads – a key source of demand for contractors – are predicted to rise in value in 2017 compared to the year before, according to Dodge Data & Analytics. The value of new public works construction & engineering projects, which include highway, street, and bridge construction as well as natural gas and oil pipelines and environmental work, is expected to rise 6%. The forecast represents improvement over 2016, when the value of new public works projects fell by 3% year over year. Demand is being driven in part by highway and bridge work funded by the new federal transportation bill.

New US regulations make it easier for companies that construct highways, streets, and bridges to begin or expand their use of drones. The FAA in mid-2016 issued commercial drone regulations that allow construction companies to begin using drones within days, rather than weeks or months. The infrastructure sector, along with the engineering & construction sector, leads in the number of exemption applications since the FAA began granting exceptions to its ban on the commercial use of drones. According to the Association for Unmanned Vehicle Systems International, nearly 40% of FAA-approved exemptions so far have come from these sectors.

Industry Indicators

  • The value of US nonresidential construction spending, a demand indicator for builders, rose 4.1% year-to-date in November 2016 compared to the same period in 2015.
  • US steel mill product prices, an indicator of commodity steel product costs used in construction, rose 8.7% in December 2016 compared to the same month in 2015.
  • The spot price of crude oil, which affects highway construction costs for asphalt, bituminous concrete, plastic pipe products, and for running equipment fleets, rose 50.3% in the week ending January 13, 2017, compared to the same week in 2016.

Posted by Jeff Johnson.

Read the Entire Engineering & Construction M&A 1st Quarter Newsletter Here