Engineering Inc - May/June 2018 - 70

MERGERSANDACQUISITIONS

Corporate Matchmaking in 2018
on a Record-Setting Pace
BY NICK BELITZ

A

nnouncements of corporate marriages abounded in the
first part of the year and, as shown in the list of deals
below, ACEC Members were no exception. Morrissey
Goodale's own data shows 133 industry deals completed as of this writing, putting 2018 on pace to exceed the total
number of deals completed in 2015, the banner year for industry
M&A (See chart).
In addition to sheer volume, and, based on the types of firms
buying and selling, deal-makers have array of interests. Recent
trends favoring environmental consulting, civil infrastructure,
transportation and public works firms are holding up given
widespread needs in the public and private sector, but we also
see acquisitions of firms offering architecture and M/E/P services
for various market sectors, plus land development services. The
broad-based nature of these deals indicates a market for engineering and related services expanding on all fronts, but a closer
look at the data reveals some interesting trends at work.
First, the numbers reveal a preponderance of deals with sellers
based west of the Mississippi River. The usual hotbed of M&A
activity-Texas and California, perennially sought in corporate
matchmaking given the large sizes of their respective economies
and presumed long-term needs for engineering design-continue to lead the pack.
Judging by the number of deals, buyers seem to be spending
a lot of time in the Golden State in particular. ACEC members,
however, also made deals in Colorado, Utah, Arizona, Idaho,
Wyoming and Alberta, Canada. This indicates a healthy demand
for the Rocky Mountain West firms and, by extension, the civil,
water, environmental and commercial markets they serve.
Secondly, while publicly traded engineering firms maintain
a strong interest in acquisitions, other firms such as NV5 and
Stantec looked overseas to broaden services and diversify client

Global M&A-2007 to Projected 2018
Deals
400

350

bases. These two firms combined for deals in the U.K., New
Zealand and Hong Kong while Tetra Tech and Arcadis acquired
in Australia and the U.K., respectively. WSP also left its North
American base to make a large acquisition in Norway. Given the
overall health and attractiveness of engineering markets in the
U.S. and Canada, North American buyers making international
acquisitions suggests a willingness to parlay profits earned at
home into new ventures or expansions in other, more geographically distant markets.
What is happening in the engineering industry is a reflection
in the rest of the business world. Kiplinger's reported overall
M&A activity in the general economy is off to a "sizzling pace"
and up 60 percent in the first quarter of 2018 as compared with
2017.
Across economic sectors, deal-making was down in 2017 relative to the previous year, and the engineering industry, while
showing robust activity of 310 global deals, was still off the
pace of the previous year. While Kiplinger's noted companies
may have waited for tax reform to become law in 2017 before
pursuing M&A transactions, what is clear today is deal-making
across industries is off to a much stronger start than what we
saw in 2017.
So why the corporate love-fest? Recent data and Morrissey
Goodale's own experience point to a combination of three critical
factors: a strengthening economy in the U.S. and abroad, with
U.S. growth expected to be just under 3 percent but with global
growth reaching 3.8 percent; and a monetary environment with
interest rates that are still low but projected to rise over time.
Finally, lower tax rates in the U.S. make more cash available for
firms to invest in other businesses.
Despite the current robust M&A activity, we caution against
any judgment that says we are working in either a buyer's or
seller's market. While the large number of deals may
indicate a rush to corporate marriage, our experience suggests that with numerous buyers and sellers,
both sides in a deal are dedicating ample time and
resources to evaluate before making a commitment.
350
310

300

RECENT ACEC DEAL-MAKERS
APRIL 2018

240

ACEC member Engineering Consulting Services
(ECS) (Chantilly, Va.) acquired GEM Engineering,

200

100

0

70

2007

2009

ENGINEERING INC.

2011

MAY / JUNE 2018

2013

2015

2018
P

Inc. (GEM) (Louisville, Ky.). GEM, a geotechnical
engineering, construction materials testing and
environmental services firm, will become the
Louisville location of ECS Southeast.



Table of Contents for the Digital Edition of Engineering Inc - May/June 2018

Engineering Inc - May/june 2018
Contents
From Acec to You
Market Watch
Legislative Action
2018 Annual Convention Recap
Acec 2018 Engineering Excellence Awards
Smart City Solutions
Mastering Business Communications
Powering Up Puerto Rico
Personal Philanthropy
Mergers and Acquisitions
Members in the News
Business Insights
Engineering Inc - May/June 2018 - Intro
Engineering Inc - May/June 2018 - Engineering Inc - May/june 2018
Engineering Inc - May/June 2018 - Cover2
Engineering Inc - May/June 2018 - Contents
Engineering Inc - May/June 2018 - 2
Engineering Inc - May/June 2018 - 3
Engineering Inc - May/June 2018 - From Acec to You
Engineering Inc - May/June 2018 - 5
Engineering Inc - May/June 2018 - Market Watch
Engineering Inc - May/June 2018 - 7
Engineering Inc - May/June 2018 - Legislative Action
Engineering Inc - May/June 2018 - 9
Engineering Inc - May/June 2018 - 2018 Annual Convention Recap
Engineering Inc - May/June 2018 - 11
Engineering Inc - May/June 2018 - 12
Engineering Inc - May/June 2018 - 13
Engineering Inc - May/June 2018 - 14
Engineering Inc - May/June 2018 - 15
Engineering Inc - May/June 2018 - Acec 2018 Engineering Excellence Awards
Engineering Inc - May/June 2018 - 17
Engineering Inc - May/June 2018 - 18
Engineering Inc - May/June 2018 - 19
Engineering Inc - May/June 2018 - 20
Engineering Inc - May/June 2018 - 21
Engineering Inc - May/June 2018 - 22
Engineering Inc - May/June 2018 - 23
Engineering Inc - May/June 2018 - 24
Engineering Inc - May/June 2018 - 25
Engineering Inc - May/June 2018 - 26
Engineering Inc - May/June 2018 - 27
Engineering Inc - May/June 2018 - 28
Engineering Inc - May/June 2018 - 29
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Engineering Inc - May/June 2018 - 33
Engineering Inc - May/June 2018 - 34
Engineering Inc - May/June 2018 - 35
Engineering Inc - May/June 2018 - 36
Engineering Inc - May/June 2018 - 37
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Engineering Inc - May/June 2018 - 39
Engineering Inc - May/June 2018 - 40
Engineering Inc - May/June 2018 - 41
Engineering Inc - May/June 2018 - 42
Engineering Inc - May/June 2018 - 43
Engineering Inc - May/June 2018 - 44
Engineering Inc - May/June 2018 - 45
Engineering Inc - May/June 2018 - 46
Engineering Inc - May/June 2018 - 47
Engineering Inc - May/June 2018 - 48
Engineering Inc - May/June 2018 - 49
Engineering Inc - May/June 2018 - Smart City Solutions
Engineering Inc - May/June 2018 - 51
Engineering Inc - May/June 2018 - 52
Engineering Inc - May/June 2018 - 53
Engineering Inc - May/June 2018 - 54
Engineering Inc - May/June 2018 - 55
Engineering Inc - May/June 2018 - Mastering Business Communications
Engineering Inc - May/June 2018 - 57
Engineering Inc - May/June 2018 - 58
Engineering Inc - May/June 2018 - 59
Engineering Inc - May/June 2018 - 60
Engineering Inc - May/June 2018 - 61
Engineering Inc - May/June 2018 - Powering Up Puerto Rico
Engineering Inc - May/June 2018 - 63
Engineering Inc - May/June 2018 - 64
Engineering Inc - May/June 2018 - 65
Engineering Inc - May/June 2018 - Personal Philanthropy
Engineering Inc - May/June 2018 - 67
Engineering Inc - May/June 2018 - 68
Engineering Inc - May/June 2018 - 69
Engineering Inc - May/June 2018 - Mergers and Acquisitions
Engineering Inc - May/June 2018 - 71
Engineering Inc - May/June 2018 - 72
Engineering Inc - May/June 2018 - Members in the News
Engineering Inc - May/June 2018 - 74
Engineering Inc - May/June 2018 - 75
Engineering Inc - May/June 2018 - Business Insights
Engineering Inc - May/June 2018 - Cover3
Engineering Inc - May/June 2018 - Cover4
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