Engineering Inc. - March/April 2015 - (Page 52)

Mergers and Acquisitions By N e i l C h u r m a N 2014 a Record Year for Engineering M&A T he New Year marked the end of one of the biggest years ever for industry mergers and acquisitions activity. The sheer number of transactions among engineering firms, as well as the size and scale of the deal making, was unprecedented in numerous ways. In 2014, we tracked 203 domestic deals (those involving a U.S.-based seller), which set a new industry high-water mark. This topped the previous record of 180 deals, set in both 2008 and 2013, by nearly 13 percent. Beyond the remarkable number of deals, last year saw many of the largest transactions in our industry's history. In the November/December 2014 issue of Engineering Inc., we covered several megadeals, which were pervasive in 2014, and the trend has not slowed down. Danish firm Ramboll Group merged with 1,500-person ENVIRON of Arlington, Va., in December. Early this year, HDR announced its acquisition of 600-person Infrastructure Corporation of America (ICA). The strength of the economy, coupled with growing corporate cash reserves and soaring share prices, contributed to the boom. In a statement, Ramboll Group called North America "the world's most attractive market for consulting engineering services." This sentiment appears to have been echoed by firms across the globe. In 2014, there were 25 deals in which an international buyer merged with or acquired a U.S.-based firm-up from 17 the year before. The U.S. market has proven to be a destination for global firms, as economies in Europe, Asia and Africa continue to face challenges. It remains to be seen if the recent decline in oil prices will affect this momentum, but the broader U.S. market appears to provide some cushion to firms that are diversified in their markets and services. Within U.S. borders, firms continued to expand into new domestic markets. Last year, 114 deals involved two firms based in different states, up slightly from 111 in 2013. This signals that U.S. firms remain bullish on growth, as they seek out new geographies and end markets for expansion. We saw this figure dip during the recession when firms focused more on shoring up their existing positions in their current geographies. In many ways, 2014 may be hard to top in terms of industry M&A activity, but there do not appear to be any signs of consolidation slowing down. As long as the U.S. economy stays on the upswing-and if oil prices can find their footing-we expect the pace of deal making to continue, if not ramp up, in 2015. Recent ACEC Deal-Makers January 2015 ACEC Member HDR (Omaha, Neb.) acquired Infrastructure Corporation of America (ICA) (Brent- wood, Tenn.), a transportation engineering, asset maintenance and management specialist, and MEI, LLC (Pooler, Ga.), a liquid natural gas consulting firm. ACEC Member Strand Associates (Madison, Wis.) acquired O'Malley Engineers (Brenham, Texas), a provider of civil engineering and surveying services. December 2014 ACEC Member CP&Y (Dallas) acquired ACEC Member The Wallace Group (Waco, Texas), an engineering, architectural, survey and subsurface utility engineering firm. ACEC Member CDM Smith (Cambridge, Mass.) acquired The Louis Perry Group (Wadsworth, Ohio), an engineering, architectural and design-build firm. 52 ENGINEERING INC. MaRCh / apRIl 2015 ACEC Member DOWL HKM (Anchorage, Alaska) announced the addition of Buckhorn Geotech (Montrose, Colo.), a civil, structural and geotechnical engineering firm, to its portfolio. ACEC Member S&ME (Raleigh, N.C.) announced its intent to purchase ACEC Member Littlejohn (Nashville, Tenn.), a planning, engineering and environmental design firm. ACEC Member Ayres Associates (Eau Claire, Wis.) entered into a letter of intent to acquire SAA Design Group (Madison, Wis.). T o view the most up-todate and "live" versions of the M&A heat maps and to see the buyers and sellers in each state, go to Watch the M&A Takeaway video that accompanies this article, presented by Mick Morrissey at www.morrisseygoodale. com/ACECMergers/ MarchApril2015 Neil Churman is principal consultant of Morrissey Goodale LLC-a strategy, M&A and human capital solutions firm serving the A/E/C industry. Churman, who is based in the firm's Houston office, can be reached at nchurman@

Table of Contents for the Digital Edition of Engineering Inc. - March/April 2015

Engineering Inc. - March/April 2015
From ACEC to You
Market Watch
Legislative Action
Senator Orrin Hatch
Breaking the Mold
App to Order
Making a Quality-of-Life Difference
Leading the Pac
2015 Annual Convention Preview
Guest Column
Business Insights
Members in the News
Mergers and Acquisitions

Engineering Inc. - March/April 2015