Though overall 2012 merger and acquisition (M&A) activity in the engineering and construction industry did not meet levels seen in 2011, an uptick in fourth quarter activity points to signs of recovery, according to Engineering Growth, a quarterly analysis of the global engineering and construction industry by consultant PwC US.
“With the continued elevated level of uncertainty through the end of the year, we saw many deal makers staying on the sidelines or engaging in smaller, bolt-on acquisitions. However, as the global engineering and construction sector continues on its path of slow recovery, we remain cautiously optimistic and expect the M&A arena to follow a similar trajectory of modest growth in 2013. Growing infrastructure needs, expanding urbanization, and the need for cleaner, environmentally friendly and sustainable energy and water continue to be the driving forces of M&A activity in the sector,” said H. Kent Goetjen, U.S. engineering and construction leader with PwC.
In 2012, there were 168 deals (with values of $50 million or more) totaling $49.3 billion, compared with 181 transactions worth $73.3 billion in 2011. Overall 2012 M&A volume and value declined compared with 2011 levels, but the sector did see increased activity in the fourth quarter of 2012: 57 deals totaling $13.9 billion, an increase in value and volume compared with the third quarter of 2012 (31 transactions totaling $10.8 billion).
Despite the slowdown in engineering and construction dealmaking, financial investors continue to slowly gain momentum. In 2012, the participation of financial advisors was higher than the average 10-year rate of about 33 percent of financial acquirers and they were an active participant in some of the largest deals during the year, potentially suggesting signs of recovery and opportunity in the sector.
Transactions in the construction materials category led deals in the full year of 2012 in both value and volume with 46 deals over $50 million totaling $16.57 billion, outnumbering the construction segment, the usual leader and second in terms of volume in 2012. Multiple large and mega deals throughout 2012, including the only mega-deal in the fourth quarter, involved targets associated with the construction materials segment (notably, cement and concrete), contributing to a 70% increase in value in the segment’s deals over 2011.
The majority of engineering and construction transactions in 2012 were local deals, for both U.S. targets and targets and acquirers from other parts of the world. Asia and Oceania remained the most active region in engineering and construction dealmaking, representing 68 deals totaling $15.09 billion in 2012, followed by Europe and North America. The United States was the most active individual nation, engaging in the largest number of deals and also tending to generate higher deal values due to the relative maturity, size, and financial stability of U.S.-affiliated dealmakers.
For a copy of Engineering Growth, visit: www.pwc.com/us/
Related Stories
| Apr 17, 2012
Princeton Review releases “Guide to 322 Green Colleges”
The guide profiles 322 institutions of higher education in the U.S. and Canada that demonstrate notable commitments to sustainability in their academic offerings, campus infrastructure, activities and career preparation.
| Apr 17, 2012
FMI report examines federal construction trends
Given the rapid transformations occurring in the federal construction sector, FMI examines the key forces accelerating these changes, as well as their effect on the industry.
| Apr 17, 2012
Freese and Nichols awarded Malcolm Baldridge National Quality Award
Freese and Nichols is the only engineering and architecture firm to ever receive this recognition.
| Apr 17, 2012
Miramar College police substation in San Diego receives LEED Platinum
The police substation is the first higher education facility in San Diego County to achieve LEED Platinum Certification, the highest rating possible.
| Apr 17, 2012
Alberici receives 2012 ASA General Contractor of the Year award
Alberici has been honored by the ASA eight times in the award’s nineteen-year history--more than any other general contractor in its class.
| Apr 16, 2012
Freeland promoted to vice president at Heery International
Recently named to Building Design+Construction’s 40 Under 40 Class of 2012.
| Apr 16, 2012
University of Michigan study seeks to create efficient building design
The result, the researchers say, could be technologies capable of cutting the carbon footprint created by the huge power demands buildings place on the nation’s electrical grid.
| Apr 16, 2012
UNT lab designed to study green energy technologies completed
Lab to test energy technologies and systems in order to achieve a net-zero consumption of energy.
| Apr 16, 2012
Shawmut awarded Tag Heuer builds in Florida and Pennsylvania
Both projects are scheduled to be completed this spring.
| Apr 16, 2012
Batson-Cook breaks ground on senior living center in Brunswick, Ga.
Marks the third Benton House project constructed by Batson-Cook.
