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Archive for the ‘Engineering/Construction’ Category

Engineering & Construction Industry News

By Jeff Johnson | Oct 15, 2015

Hard HatAs with other industries the engineering & construction space is continuing to evolve with technology. This trend has had an impact on M&A and technology companies look to get a foothold in the space. As an example, Bentley Systems, Incorporated announced in March that it had acquired the business of Oakland, California based EADOC, LLC, a provider of construction management cloud services. Bentley said that this addition to its MANAGEservices (cloud services) offerings helps construction managers at engineering/construction management firms and infrastructure owner organizations with capital projects to reduce risk and staff hours, improve information quality, and provide owners with real-time visibility into costs. EADOC allows facility owners to increase return on investment through faster project completions, easily monitor project financial performance, and maintain detailed construction records without administrative staff.

US Construction Spending Hits New Post-Recession Peak, US construction spending has hit a new high. Construction spending nationwide rose 0.8% in May to a seasonally adjusted annual rate of $1.036 trillion. The welcome bump represents the highest level since October 2008, according to the Commerce Department. Spending broke the $1 trillion mark in March 2015. Reaching the new peak was possible because of private construction spending, the highest since July 2008. The latest milestone can be attributed to spending on private nonresidential building, which inched up 1.5% to $393 billion, as well as manufacturing spending during the past year. Looking at the latest figures, some economists also anticipate an increase in activity from homebuilders that should help boost the labor market and the overall economy.

Read the Entire Engineering and Construction M&A 4th Quarter Newsletter Here


Engineering and Construction M&A News

By Jeff Johnson | Jul 16, 2015

Construction and engineeringConsolidation in the crowded mid-sized engineering and construction segment is inevitable as smaller companies look to compete with their larger counterparts on larger, more complex projects and build-out capabilities. The industry is continuing on a path toward full-service integration and mid-size firms have to increase capabilities to compete.

Commercial and heavy construction contractors may see more opportunities to bid on projects in the southern US in the second half of 2015. Several southern US states with growing populations and rejuvenated economies are expected to serve as hotbeds of activity for the construction sector, according to Associated Builders and Contractors. Metropolitan areas like Houston, Dallas, Oklahoma City and Atlanta have experienced strong economic turnarounds since the late-2000s recession. Many southern states are logging rapid population growth, a leading indicator for demand in the industry, and seeing gains in both residential and commercial construction. As an example, Louisiana has received significant industrial investment, bolstered by the energy business, rebounding residential real estate, and the widening of the Panama Canal.

Construction firms stand to gain business as Canadian infrastructure projects, particularly work on public transit in and around its largest urban areas, and receive funding through a newly approved federal budget. A Public Transit Fund, recently rolled out as part of a new federal budget, offers a permanent source of funding for Canadian infrastructure projects that aim to alleviate problematic congestion across many of the country’s largest cities. According to the Canadian Construction Association, which represents more than 20,000 member firms, the transit fund allows municipalities to proceed with long-term public transit planning. Available in 2017, the allocated funding is intended for public-private partnerships and includes $750 million doled out over two years with $1 billion a year thereafter. The budget also maintains a $53-billion program that extends through 2024 to enhance provincial and municipal infrastructure.

Posted by Jeff Johnson.

Read the Entire Engineering and Construction M&A 3rd Quarter Newsletter Here


Engineering and Construction M&A Industry News

By Jeff Johnson | Jun 05, 2015

EngineeringThe leveling off of housing starts could force many would-be buyers in the engineering and construction space to play it safe as they look for a trend in the market to solidify. However, with financing still historically cheap and cash-rich balance sheets at the ready, buyers remain anxious to put their capital to work. In addition, a decline in construction activity could lead savvy buyers to become as aggressive as multiples begin to tail off.

According to data published by the Interindustry Economic Research Fund, Inc. (IERF), revenue (in current dollars) for US engineering and R&D services is forecast to grow at an annual compounded rate of 8 percent between 2015 and 2019 while the value of US new public and private construction spending is forecast to grow at an annual compounded rate of 7 percent. The construction sector is growing, and many firms are increasingly optimistic about their revenue and hiring forecasts for the next year and beyond. A new report from the US Bureau of Labor Statistics predicts the industry will add 1.6 million jobs through 2022.

The value of US nonresidential construction spending, an indicator of the health of the construction market, rose 3.5 percent year-to-date in February 2015 compared to the same period in 2014. The value of US residential construction spending, an indicator of the health of the construction market, fell 0.8 percent year-to-date in February 2015 compared to the same period in 2014. US steel mill product prices, an indicator of commodity steel product costs used in construction, fell 4.8 percent in March 2015 compared to the same month in 2014.

The US is one of the top 10 most attractive national markets for investment in infrastructure, according to a recent report by engineering firm ARCADIS. But while the US needs to rehabilitate $3.6 trillion in existing infrastructure, government budgets are forecast to fund only about $2 trillion of this need by 2020, based on estimate by American Society of Civil Engineers. To fill the gap, investors and governments are exploring public-private partnerships (P3s) models that combine public money with private investment to fund needed infrastructure.

Posted by Jeff Johnson.

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

 

 


Engineering and Construction Industry News

By Jeff Johnson | Mar 13, 2015

Engineering and ConstructionM&A activity in the engineering and construction space has been driven in part by the desire to increase services and trades. General contractors have broadened their capabilities by acquiring specialty contractors but have also acquired design and consultancy firms as they look to offer a full-service value-added solution. A recent global example was Hill International, a global construction company, acquiring Cadogans, a U.K. engineering consultancy company, in November 2014.

The US is one of the top 10 most attractive national markets for investment in infrastructure, according to a recent report by engineering firm ARCADIS. But while the US needs to rehabilitate $3.6 trillion in existing infrastructure, government budgets are forecast to fund only about $2 trillion of this need by 2020, based on estimate by American Society of Civil Engineers. To fill the gap, investors and governments are exploring public-private partnerships (P3s) models that combine public money with private investment to fund needed infrastructure in engineering and construction.

Posted by Jeff Johnson.

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


Q4 Engineering & Construction Industry M&A Report

By Kim Levin | Nov 21, 2014

M&A activity in the Engineering and Construction sector for North American based target companies in Q3 2014 included 67 closed deals according to data provided by S&P Capital IQ.  This is a slight decrease in deal count since Q2 2014, where 72 transactions occurred. Total transaction value increased dramatically between Q2 and Q3 from $565 million to $6.57 billion due to the AECOM purchase of URS Corporation.

Read the Entire Engineering and Construction M&A 4th Quarter Newsletter Here

 


Q3 Engineering and Construction Industry M&A Report

By Kim Levin | Sep 26, 2014

EngineeringM&A activity in the Engineering and Construction sector for the United States based target companies in Q2 2014 included 54 closed deals according to data provided by S&P Capital IQ.  The ENR Construction Industry Confidence Index survey has shown that despite lower-than-expected growth in in the construction industry most executives believe the recovery will continue, and possibly accelerate, throughout the rest of the year. A minor surge in demand has been tempered by the soft pricing for materials, limiting fears from a year ago when prices spiked with the housing recovery.

Read the Entire Engineering and Construction M&A 3rd Quarter Newsletter Here


Q2 Engineering & Construction Mergers & Acquisitions Update

By Kim Levin | May 16, 2014

ENCIPG-Building ConstructionM&A activity in the Construction and Engineering sector for North American based target companies in Q1 2014 included 58 closed deals according to data provided by S&P Capital IQ. According to a report from international consulting firm PriceWaterhouseCoopers, construction and engineering M&A activity has rebounded somewhat after a number of down years following the global recession in 2008. Strategic and financial buyers with ample cash on their balance sheets are looking to broaden their offerings by acquiring a wide range of specialty contractors. Traditional strategic purchasers like EMCOR and Mastec remain active in their pursuit of a growth through acquisition strategy.

Read the Entire Engineering & Construction M&A 2nd Quarter Newsletter Here


Engineering & Construction Q1 M&A Update

By Kim Levin | Mar 07, 2014

ENCIPG-BlueprintsM&A activity in the North American Construction and Engineering sector for Q4 2013 through February 1, 2014 included 86 deals announced or closed according to data provided by S&P Capital IQ. According to data published by global consulting firm Ernst and Young, 2014 could show a significant uptick in M&A for a sector that has been negatively impacted since the global recession in 2008. According to data from the US Census Bureau, privately-owned housing units authorized by building permits in December 2013 were at a seasonally adjusted annual rate of 986,000. This is 3.0% below the revised November rate of 1,017,000, but is 4.6% above the December 2012 estimate of 943,000. Privately-owned housing starts in December were at a seasonally adjusted annual rate of 999,000. This is 9.8% below the revised November estimate of 1,107,000, but is 1.6% above the December 2012 rate of 983,000. The numbers marked the highest level of housing starts since February 2008, with permits also near a five-year high, indicating an increase in activity will likely continue through 2014.

Read the Entire Engineering & Construction 1st Quarter Newsletter Here


Engineering & Construction M&A Activity Update

By Kim Levin | Dec 27, 2013

Building ConstructionM&A activity in the North American construction and engineering sector in the third quarter of 2013 was strong with 60 deals announced or closed in the period according to data provided by S&P Capital IQ. The most active construction subsector included infrastructure-related companies focused on construction of transportation-related projects. The engineering subsector was led by surveying companies focused on industrial and infrastructure-related projects.

Read the Entire Engineering & Construction 4th Quarter Newsletter Here


Engineering & Construction M&A Update

By Kim Levin | Oct 04, 2013

ConstructionThe North American construction and engineering industries appear to be on a continued path of consolidation as larger companies fight aggressively to scoop up smaller competitors to stake claims for additional market share. Since 2010, consolidation in the construction and engineering sectors in North America has been dominated by transactions with enterprise value under $100 million. M&A in the sector has benefited from favorable financing condition and disruptive technological innovations serving North America’s oil and natural gas exploration effort.

Read the Entire Engineering & Construction 3rd Quarter Newsletter Here