In spite of a weakening economy, ZweigWhite advisors continue to see significant interest in M&A activity in the architecture, engineering and environmental consulting industries.
"Our data indicates that overall deal volume is down this year roughly 10% to 15% verses last, but its important to keep in mind that 2007 was an especially strong year-the strongest we've seen in decades," says Steve Gido, Principal M&A advisor with ZweigWhite's Financial Advisory Services Group. "One could argue that this year's pace is even more surprising and resilient given the mixed economic climate," says Gido.
Tightening credit markets, which have put a damper on M&A activity in other industries, has not had a profound effect on the A/E & environmental consulting industry. Deals in the environmental sector in particular seem to be on the rise. Notable transactions this year include the acquisition Jones & Stokes by ICF International (Fairfax, VA), the acquisition of Earth Tech by AECOM (Los Angeles, CA), the acquisition of LFR, Inc. by ARCADIS (Amersfoort, Netherlands), and the acquisition of Geomatrix Consultants, Inc. by AMEC (London, UK).
With the continued weakness of the U.S. dollar, global firms continue to view the U.S. as fertile ground. In addition to the above referenced acquisitions by ICF, ARCADIS and AMEC, many more international firms such IBI Group (Toronto, Ontario); Oranjewoud (Heerenveen, Netherlands); and WorleyParsons LTD (North Sydney, Australia); among others have all made major strategic purchases in the U.S or Canada.
Gido summarizes that "deals happen in both stronger and weaker economic environments, and when properly timed and planned, mergers & acquisitions continue to be an effective tool for both strategic growth and ownership transition in the design industry."