InSight

Exit and Growth Strategies for Middle Market Businesses

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


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