2009 limps out with mergers, closings, Dubai
Mergers and acquisitions among AEC firms are supposedly down this year, but don't tell that to the 450 staff at A/E firm Ellerbe Becket, recently acquired by AECOM, or the 15,000 at Parsons Brinckerhoff who were gobbled up by the U.K.'s Balfour Beatty last month.
AEC firms of virtually every size and type experienced M&A (mostly “A”) activity in the last few months. New York City design firm Mancini Duffy picked up Washington, D.C., architecture firms Still and Svitchan Associates and Michael Winstanley Architects Planners. Kansas-based engineering giant Terracon (2,500 staff) bought up Alabama's Gallet & Associates (150 staff)) and Aquaterra (100), Baton Rouge, La., while Dutch engineering colossus Arcadis swallowed up Malcolm Pirnie Inc., a 1,700-person environmental firm in White Plains, N.Y.
The list goes on: Boston's Suffolk Construction acquired William A. Berry & Son, moving Suffolk into BD+C's top 20 U.S. construction firms by volume; A/E firm Nelson, already on a buying binge, picked up Black Cow Architects, Boston; Edmonton's Stantec snapped up Philadelphia healthcare designer Granary Associates; and EwingCole scooped up healthcare firm Robert D. Lynn Associates.
Then there were the out-and-out closings. Baltimore's CSD Architects shuttered in October, after 62 years in business, and Boston architecture firm Cubellis Associates slammed the door on 400 or so employees last month—how bittersweet, considering that Cubellis, founded in 1986, had recently opened three new offices. It had leaped from 45th place among A/E firms on BD+C's Giants list, to 29th (with $46.5 million in billings) in '08 and had just been ranked #13 on ZweigWhite's Hot Firms List.
On top of it all, there's the new craziness in Dubai. Talk about building on shifting sands! Is it just me, or doesn't it seem like the whole thing smelled like another Ponzi scheme, with investors simply assuming that Dubai World was too big to be allowed to fail and that the emir of Abu Dhabi would bail it out?
The basic idea of turning Dubai into a financial-tourism-cultural center for the Mideast may have had some merit—what else were they going to do when they ran out of the little oil they had?—but the execution seemed way over the top, from the Burj Dubai to the indoor ski park to the $20 million the Atlantis Hotel spent on fireworks for its grand opening, only to lay off 500 people the next week.
According to BDonline, 130 member firms of the Association for Consultancy & Engineering are owed $400+ million for work in Dubai and other Gulf states. I just hope the U.S. AEC firms that have been doing work over there cashed their checks in time.
So, goodbye 2009, and good riddance. —Robert Cassidy
For suggestions on AEC strategies for 2010, visit our blog: http://www.bdcnetwork.com/blog/1340000734.html#930051093
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