Q1 AEC M&A activity

M&A activity slows in Q1 of 2012: Industry consolidation slowed markedly in the first quarter of the year, both domestically and globally.

05/02/2012


Domestic Report – Q1 activity down 11% compared to Q1 2011

Domestically, there were just 42 deals involving architecture/engineering (AE) and environmental consulting firms in the U.S. in the first quarter of the year, down from 47 for the same period last year and well off the anticipated pace of 54 deals for January through March (Figure 1).  Note: for details on all industry transactions that occurred in the first quarter of 2012, visit Morrissey Goodale.

Why the slowdown?  There are two answers.  While acquirers remain keenly interested, they are still ultra-cautious about the overall economic outlook and are demonstrating a greater willingness to walk away from deals if they are uncomfortable with the answers they get in due diligence.  On the flip side, sellers are viewing deals through the lens of what they view as a recovering economy and are having second thoughts about giving up control at the offers that buyers are putting on the table.

Figure 12012 AEC Industry M&A Activity Figure 1, Source: morrissey goodale

 

Texas and California are among the leaders in firm sales at the end of Q1, continuing a trend we have seen over the past few years.  Other states with notable firm sale activity in the first quarter include Florida and South Carolina. (Figure 2)

 

Figure 22012 AEC Industry M&A Activity Figure 2, Source: morrissey goodale

 

In another sign that the industry recovery is slow at best in the wake of the Great Recession, interstate merger and acquisition (M&A) activity fell to a pedestrian pace of 55% compared with 62% for the same period in 2011 (Figure 3).  With just over half of all domestic deals taking place across state lines, the industry remains far less optimistic than prior to the recession, when between two-thirds and three-quarters of all transactions were interstate.

 

Figure 32012 AEC Industry M&A Activity Figure 3, Source: morrissey goodale

 

The domestic market saw continued weakness in demand from overseas buyers in Q1, with just under 5% of all domestic transactions involving an international buyer, down from 8.5% for the same period last year. (Figure 4)

 

Figure 42012 AEC Industry M&A Activity Figure 4, Source: morrissey goodale

 

Publicly traded buyers were also relatively less active in shaping the domestic industry through acquisitions in the first quarter.  Only 9.5% of all deals involved a publicly traded buyer compared with almost 15% for the same period last year. (Figure 5)

 

Figure 52012 AEC Industry M&A Activity Figure 5, Source: morrissey goodale

 

International Report – Q1 activity down 25% year-over-year

 

Internationally, deal activity slowed at an even greater pace than the fall-off seen domestically. Q1 deals fell 25%, down to 35 announced deals from 47 announced for the same period last year. (Figure 6)

 

Figure 62012 AEC Industry M&A Activity Figure 6, Source: morrissey goodale

 

Canada was by far the most active international market for M and A activity in the first quarter with eleven deals in total. (Figure 7)

 

Figure 72012 AEC Industry M&A Activity Figure 7, Source: morrissey goodale

 

In the first three months of the year, U.S. firms were more active in seeking overseas opportunities through acquisitions in comparison to their international counterparts doing the same in the US.  In the first quarter, U.S. firms made seven acquisitions of international firms compared to international firms making just two acquisitions of U.S. firms in the same period. (Figure 8)

 

Figure 82012 AEC Industry M&A Activity Figure 8, Source: morrissey goodale

 


 Morrissey GoodaleContent provided by Morrissey Goodale



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2015 Top Plant: Phoenix Contact, Middletown, Pa.; 2015 Best Practices: Automation, Electrical Safety, Electrical Systems, Pneumatics, Material Handling, Mechanical Systems
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Migrating industrial networks; Tracking HMI advances; Making the right automation changes
Understanding transfer switch operation; Coordinating protective devices; Analyzing NEC 2014 changes; Cooling data centers
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.