Tuesday, August 26, 2008

Serial acquirers keep on acquiring

In case you missed it, URS Corp. and Jacobs Engineering Group Inc. announced three acquisitions in the past week.

Two firms, three acquisitions?

Yes, you read that correctly as URS, the 50,000-person engineering, construction, and technical services firm based in San Francisco, bought LopezGarcia Group Inc., a 250-person infrastructure firm based in Dallas, Texas., and acquired most of the assets of Tryck Nyman Hayes Inc., a 60-person engineering, landscape architecture, and surveying firm based in Anchorage, Alaska.

Meanwhile, Jacobs Engineering Group announced earlier today that it has acquired a maintenance, construction, and service works contractor in England that will significantly increase its presence in Europe. The Pasadena, California-based Jacobs bought L.E.S. Engineering Limited, a Grimsby, United Kingdom company that specializes in mechanical, instrumentation, and electrical installations in the utilities industry.

According to a press release announcing the LopezGarcia deal, Gary Jandegian, president of the URS division of URS, said that the state of Texas issues a lot of government bonds— $11.1 billion worth in the first quarter of this year— which are used to pay for the type of infrastructure projects LopezGarcia works on.

Wendy Lopez, the co-founder and CEO of LopezGarcia, one of Dallas' most recognizable engineering firms, will remain with the firm as leader of its Texas initiative with a title of vice president, according to the Dallas Business Journal. LopezGarcia and URS would not disclose financial terms, but Lopez is quoted in the article as saying it was an all-cash deal. She also said that URS approached the firm about a possible merger about a year ago.

For those of you who have never had the pleasure of meeting Wendy Lopez, let me say that she is one of the most dynamic and opinionated people I have ever met. Among A/E firm leaders, she would be at or near the top of any list of people who pull no punches when you talk with them. A straight shooter in the truest sense of that phrase, I have always enjoyed talking to Lopez. While the acquisition is good news for her, it's a sad day for the industry when someone who grew her firm from a one-person operation 20 years ago to the firm it is today is no longer in charge.

MWH and Hatch Mott MacDonald also announced acquisitions in the past week as well; MWH acquiring a hydrogeological consulting firm based in Lima, Peru and Hatch Mott MacDonald acquiring a small transportation planning firm in California.

While you may have read elsewhere that the M&A trend is slowing, that's not entirely true. What is happening is that strategic buyers are taking more time vetting potential deals and are less reluctant to walk away from the table at any point in the process. So you may be hearing about less deals, but the deals that are announced now have a better chance of sticking.


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