flexiblefullpage

HORIZONTV FEATURING BD+C: WATCH EPISODES ON DEMAND AT HORIZONTV

Menu View Full Menu
Subscribe Here
billboard
interstitial1
catfish1
Currently Reading

M&A activity down in 2013 among architecture, engineering firms: Report

M&A activity down in 2013 among architecture, engineering firms: Report

Many of the firms that have traditionally been the most active buyers in the industry spent 2013 mostly on the sidelines. 

By Morrissey Goodale | February 5, 2014
Continue Reading
In 2013, consultant Morrissey Goodale observed 168 sales of U.S.-based architecture and engineering (“A/E”) firms – down nearly 7% from the record 180 sales of U.S.-based A/E firms in 2012. Similarly, just 107 international A/E firms sold in 2013, a drop of more than 20% from the 135 deals in 2012. Yet 2013 was anticipated by many to be another break-neck, record-setting year for A/E industry M&A. The economy continued to recover, performance at many firms climbed back to pre-recession levels, and things were looking up for a year of rapid deal-making. So what caused industry dealmakers to slow down after living 2012 in the fast lane? 
 
·       Owners rode the (modest) wave. As the economy persisted to creep toward respectability in 2013 and value continued to build in A/E firms, prospective sellers showed an increasing reluctance to jump at offers. Instead, they were inclined to take the longer view of building a track record of solid performance, desiring to sell at the high (or at least higher) water mark that many A/E firm leaders believe is still on the horizon.
 
·       Tax-driven deal spike late in 2012. U.S. sellers seemed to be certain they needed to sell in 2012 to minimize capital gains which were anticipated to climb in 2013. We observed an unusually high flurry of deal activity in late 2012, seemingly driven by a desire to get deals done by year end. With tax rates steady for the foreseeable future, we anticipate the competitive environment, age, ownership and leadership transition, and other factors will drive owners’ desires to sell their firms.
 
·       Large firms took a breather in 2013. Many of the firms that have traditionally been the most active buyers in the industry spent 2013 mostly on the sidelines. Firms like AECOM, SNC-Lavalin, Genivar (now WSP Global), IBI Group, ARCADIS, and URS, among others, slowed or stopped their M&A programs in 2013. This decline may be attributable to the need to integrate the firms they acquired over the last few years, work on internal initiatives, or simply being unable to find and close deals that met their strategic needs at appropriate valuations in 2013.
 

About Morrissey Goodale LLC

Based in Newton, Mass., Morrissey Goodale LLC is a leading management consulting and research firm serving the architecture, engineering, and Construction (AEC) industry. 

Tags

Related Stories

Rendering of Rhode Island Life Sciences Building
Laboratories | Oct 5, 2022

Bigger is better for a maturing life sciences sector

CRB's latest report predicts more diversification and vertical integration in research and production.

Co-living spaces, wellness-minded designs among top innovations in multifamily housing
Multifamily Housing | Oct 5, 2022

Co-living spaces, wellness-minded designs among innovations in multifamily housing

The booming multifamily sector shows no signs of a significant slowdown heading into 2023. Here is a round up of Giants 400 firms that are driving innovation in this sector.

Material Shortages
Contractors | Oct 5, 2022

Materials shortages, cost spikes throwing Design-Bid-Build process out of whack

The traditional Design-Bid-Build delivery process is under considerable stress this year as materials shortages and cost spikes are upending usual practices, according to a new report from JLL.

SCP Headquarters ext 1
Green | Oct 5, 2022

In California, a public power provider’s new headquarters serves as a test case for an innovative microgrid and for reducing greenhouse gas emissions

Sonoma Clean Power (SCP), the public power provider for California’s Sonoma and Mendocino Counties, recently unveiled its new all-electric headquarters.

Which comes first, the building or the cost estimate
Contractors | Oct 4, 2022

Which comes first, the building or the cost estimate?

At the start of a project, don’t forget to establish financial parameters when you’re discussing the design and program. By establishing the costs up front, you can avoid the pitfalls that might derail your project and guarantee its lasting success.

Fire safety considerations for cantilevered buildings, One Central Park, Lilker
Fire and Life Safety | Oct 4, 2022

Fire safety considerations for cantilevered buildings

Bold cantilevered designs are prevalent today, as developers and architects strive to maximize space, views, and natural light in buildings. Cantilevered structures, however, present a host of challenges for building teams, according to José R. Rivera, PE, Associate Principal and Director of Plumbing and Fire Protection with Lilker.

Multifamily Utility Usage
| Oct 4, 2022

Rental property owners want access to utility usage data for whole properties

As pressure from investors for ESG reporting mounts, owners of multifamily properties increasingly look to collect whole-building utility usage data.

Aspen Lumberyard Community ext 1
| Oct 4, 2022

In dire need of affordable housing, Aspen, Colo. will get a development that provides 277 affordable homes

A few miles from downtown Aspen, Colo., a development will provide 277 new affordable homes for an area experiencing a dire affordable housing crisis.

California regulators move to ban gas heaters for existing buildings
Green | Oct 3, 2022

California regulators move to ban gas heaters for existing buildings

California regulators voted unanimously recently on a series of measures that include a ban on the sale of natural gas-powered heating and hot water systems beginning in 2030.

Prior Performing Arts Center ext
| Oct 3, 2022

The College of the Holy Cross completes a $110 million performing arts center

In Worcester, Mass., a one-hour drive from Boston, the College of the Holy Cross has completed its $110 million Prior Performing Arts Center.

boombox1
boombox2

Top Articles

native1

More In Category

Warehouses

California bill would limit where distribution centers can be built

A bill that passed the California legislature would limit where distribution centers can be located and impose other rules aimed at reducing air pollution and traffic. Assembly Bill 98 would tighten building standards for new warehouses and ban heavy diesel truck traffic next to sensitive sites including homes, schools, parks and nursing homes.

halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021