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
Healthcare Facilities | May 28, 2024
Healthcare design: How to improve the parking experience for patients and families
Parking is likely a patient’s—and their families—first and last touch with a healthcare facility. As such, the arrival and departure parking experience can have a profound impact on their experience with the healthcare facility, writes Beth Bryan, PE, PTOE, PTP, STP2, Principal, Project Manager, Walter P Moore.
MFPRO+ News | May 28, 2024
ENERGY STAR NextGen Certification for New Homes and Apartments launched
The U.S. Environmental Protection Agency recently launched ENERGY STAR NextGen Certified Homes and Apartments, a voluntary certification program for new residential buildings. The program will increase national energy and emissions savings by accelerating the building industry’s adoption of advanced, energy-efficient technologies, according to an EPA news release.
Women in Design+Construction | May 28, 2024
Commerce Department launches Million Women in Construction Community Pledge
The U.S. Department of Commerce launched its Million Women in Construction Community Pledge this month to boost the ranks of women in construction companies. Federal investments are creating a construction boom that is increasing job opportunities for construction and trade workers.
Laboratories | May 24, 2024
The Department of Energy breaks ground on the Princeton Plasma Innovation Center
In Princeton, N.J., the U.S. Department of Energy’s Princeton Plasma Physics Laboratory (PPPL) has broken ground on the Princeton Plasma Innovation Center (PPIC), a state-of-the-art office and laboratory building. Designed and constructed by SmithGroup, the $109.7 million facility will provide space for research supporting PPPL’s expanded mission into microelectronics, quantum sensors and devices, and sustainability sciences.
MFPRO+ News | May 24, 2024
Austin, Texas, outlaws windowless bedrooms
Austin, Texas will no longer allow developers to build windowless bedrooms. For at least two decades, the city had permitted developers to build thousands of windowless bedrooms.
Resiliency | May 24, 2024
As temperatures underground rise, so do risks to commercial buildings
Heat created by underground structures is increasing the risk of damage to buildings, recent studies have found. Basements, train tunnels, sewers, and other underground systems are making the ground around them warmer, which causes soil, sand, clay and silt to shift, settle, contract, and expand.
Sports and Recreational Facilities | May 23, 2024
The Cincinnati Open will undergo a campus-wide renovation ahead of the expanded 2025 tournament
One of the longest-running tennis tournaments in the country, the Cincinnati Open will add a 2,000-seat stadium, new courts and player center, and more greenspace to create a park-like atmosphere.
Mass Timber | May 22, 2024
3 mass timber architecture innovations
As mass timber construction evolves from the first decade of projects, we're finding an increasing variety of mass timber solutions. Here are three primary examples.
MFPRO+ News | May 21, 2024
Massachusetts governor launches advocacy group to push for more housing
Massachusetts’ Gov. Maura Healey and Lt. Gov. Kim Driscoll have taken the unusual step of setting up a nonprofit to advocate for pro-housing efforts at the local level. One Commonwealth Inc., will work to provide political and financial support for local housing initiatives, a key pillar of the governor’s agenda.
Building Tech | May 21, 2024
In a world first, load-bearing concrete walls built with a 3D printer
A Germany-based construction engineering company says it has constructed the world’s first load-bearing concrete walls built with a 3D printer. Züblin built a new warehouse from a single 3D print for Strabag Baumaschinentechnik International in Stuttgart, Germany using a Putzmeister 3D printer.