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
Mixed-Use | Jul 18, 2022
Mixed-use development outside Prague uses a material made from leftover bricks
Outside Prague, the Sugar Factory, a mixed-used residential development with public space, marks the largest project to use the sustainable material Rebetong.
Building Team | Jul 15, 2022
ABC: Construction materials prices increased in June, up 20% from a year ago
Construction input prices increased 1.9% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Arenas | Jul 15, 2022
U. of Oregon renovation aims for ‘finest track and field facility in the world’
The renovation of the University of Oregon’s Hayward Field had the goal of creating the “finest track and field facility in the world.”
Building Team | Jul 14, 2022
ABC’s construction backlog inches lower in June; Contractor confidence falters
Associated Builders and Contractors reports today that its Construction Backlog Indicator fell 0.1 months in June and stands at 8.9 months, according to an ABC member survey conducted June 21 to July 5.
Sustainable Development | Jul 14, 2022
Designing for climate change and inclusion, with CBT Architects' Kishore Varanasi and Devanshi Purohit
Climate change is having a dramatic impact on urban design, in terms of planning, materials, occupant use, location, and the long-term effect of buildings on the environment. Joining BD+C's John Caulfield to discuss this topic are two experts from the Boston-based CBT Architects: Kishore Varanasi, a Principal and director of urban design; and Devanshi Purohit, an Associate Principal.
Multifamily Housing | Jul 14, 2022
Multifamily rents rise again in June, Yardi Matrix reports
Average U.S. multifamily rents rose another $19 in June to edge over $1,700 for the first time ever, according to the latest Yardi® Matrix Multifamily Report.
Building Team | Jul 14, 2022
Austin PBS gets a new state-of-the-art facility with three studios
Since the 1970s, Austin PBS, birthplace of the Austin City Limits TV series, has been based inside the communications building on the University of Texas campus—a space it has long outgrown.
Building Team | Jul 13, 2022
The YIMBY movement emerges as valuable advocate for affordable housing
Over the past few decades, developers grew accustomed to nothing but staunch opposition to dense affordable housing project proposals.
Energy | Jul 13, 2022
Electrification of buildings, new and old, furthers environmental responsibility and equity
It’s almost a cliché in our industry, but nonetheless: The greenest building is the one that is already built.
Building Team | Jul 13, 2022
Austin’s newest entertainment and hospitality complex has been made from repurposed shipping containers
A new entertainment and hospitality complex in Austin, The Pitch, has been made out of repurposed shipping containers.
