Is RTKL the canary in the coal mine?

By now, most of you have heard that privately-held A/E superfirm RTKL has been acquired by the Dutch engineering outfit ARCADIS.

I believe that RTKL is only the first of many big US-based A/E superfirms that will soon be acquired by non-US interests. I predict that non-US firms will acquire between 8-10 of the largest 25 US-based A/E firms over the next 12-18 months.

If you look at the world financial picture right now, it makes perfect sense. A weak US dollar combined with Wall Street's overvaluing of large publicly traded A/E/C firms create a win-win for buyers and sellers alike.

Until next time,

Frank A. Stasiowski, FAIA

What is Wall Street Smoking?

Check out this article consolidation in the A/E industry:
http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-17973024.htm

This is an excellent example of the great minds of Wall Street not knowing what's going on in the real world.

Wall Street bases the entire market for A/E firms on the ENR 500. In doing so, they are missing 30% of the fees generated in the design market - not to mention many firms. They measure the revenue of the publicly held "biggies", apparently based on their gross revenues (which in many cases includes the build in design-build) to measure market share of what amounts to a reduced total market. Thus the basis for their analysis is pretty well out to lunch.

Until next time,

Bruce Lynch, Publishing Director