The report below gives a good overview of the Fall 2021 M&A activity in the Engineering and Construction Industry Sector. In 2020, the worldwide construction market declined from USD 11.21 trillion in 2019 to USD 10.74 trillion as per research published by ResearchAndMarkets. The industry consistently faces macroeconomic and financial hurdles in design, schedule, budget changes, supply delays, equipment failure, labor conflicts, accidents, and natural calamities. And the impact of COVID-19 further increased the difficulties for the industry. However, the sector has shown evidence of recovery in the year 2021, and the market is expected to reach USD 13.57 trillion in 2024 at an implied CAGR of 6%. The heavy and civil engineering industry would be the fastest-growing construction category, due to low-cost labor and raw materials. The APAC region is projected to provide the most revenue to the industry compared to its European and North American competitors. Construction companies must seize opportunities in the business ecosystem to construct a better future, particularly in the context of current construction stimulus packages in the United States and Europe.

Posted by Dean C. Durbin, PE, MBA.

Read the Entire Fall 2021 Engineering and Construction Report Here

The report below gives a good overview of the Spring 2021 M&A activity in the Engineering & Construction Industry Sector. The pandemic made its presence felt cross the engineering and construction market in 2020. This caused the Associated Builders and Contractors’ Construction Confidence Index (CCI) to plummet to 38.1. In a few short months during 2020, the industry lost $60.9 billion in GDP and total jobs decreased to roughly 6.5 million, effectively wiping out two years of GDP gains and four years of job gains. However, by June the CCI rose to 55.1, indicating expansion in sales.
The global construction market data from the Business Research Company’s latest research showed that the market is expected to grow at CAGR of 7.5% from 2021 and reach $15 trillion by 2023. The top ten players constitute about 4.7% of the market. The possible reason for this is that there are large number of small players in E&C industry who cater to customers which are closer to their locations. Despite the impacts due to pandemic, there are reasons to be optimistic for the industry. The industry has applied learnings from the 2008 recession and is positioned to make the best out of 2021.

Posted by Dean C. Durbin, PE, MBA.

Read the Entire Spring 2021 Engineering and Construction Report Here

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 & Construction sector for Q3 2019 included 76 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions in the sector was announced in August when Sterling Construction Co., Inc. acquired Plateau Excavation Inc for US$400 million in cash, stock and seller notes. Plateau Excavation is located in Austell, Georgia and provides construction services. Plateau Excavation full-year 2018 revenues were approximately US$290 million.

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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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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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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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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

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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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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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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