M&A News From The Engineering & Construction Industry

M&A News From The Engineering & Construction Industry

By Peter Heydenrych

September 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.

Industry Indicators

  • US corporate profits, an indicator of corporate demand for construction services, rose 3.7% in the first quarter of 2017 compared to the same period in 2016.
  • The value of US nonresidential construction spending, a demand indicator for builders, rose 1.7% year-to-date in April 2017 compared to the same period in 2016.
  • US steel mill product prices, an indicator of commodity steel product costs used in construction, rose 13.8% in May 2017 compared to the same month in 2016.

Posted by Peter Heydenrych.

Read the Entire Engineering & Construction 3rd Quarter Newsletter Here