2007 Predicted to be Record Year for AEC Mergers and Acquisitions

By Consulting Specifying Engineer Staff January 29, 2007

This year will see a record number of acquisitions in the AEC industry, according to industry management consulting firm Morrissey Goodale LLC .

The accelerating merger and acquisition activity is driven by strong performance and record profits, providing capital for expansion. Firms have the opportunity to broaden their reach geographically, enter new markets, add clients, augment their services and increase their staff. According to Morrissey, consolidation in the industry will be characterized by the following trends:

More deals in Florida and Arizona. “The recent slowdown in the residential market has created some short-term easing in deal valuations, resulting in more opportunities for Northeast and Midwest firms looking to grow in these Sunbelt states,” Morrissey said.

Texas and California will continue to be hot. ted with acquisitions in both of these states,” he said.

More private equity funding. “We haven’t seen this amount of interest from private equity since 2000 when there were multiple roll-up proposals for consulting engineering and design firm on the books,” Morrissey explained.

The primary risk to this forecast is “another significant terrorist event,” according to Morrissey.