Record 2014 for M&A activity in U.S. A/E industry

Houston — Fueled by a resurgent economy that boosted firm profits, domestic merger & acquisition activity in the architecture and engineering (A/E) industry hit record levels in 2014, according to Morrissey Goodale LLC, a business management consulting and training firm to the A/E industry. After two years of relative stagnation, the M&A marketplace in the United States regained momentum in 2014 thanks to greater industry confidence on the part of buyers and investors.

In 2014, Morrissey Goodale tracked a record 203 sales of U.S.-based A/E firms, representing a 12.8 percent increase over the 180 domestic deals recorded in 2013. Although sales of international firms still lagged behind historic levels, they ticked up slightly from 111 deals in 2013 to 114 deals last year. Overall, global deal-making in the A/E industry increased 8.9 percent in 2014.

Other findings from Morrissey Goodale’s 2014 AEC M&A Year in Review include:

Texas and California remain the hottest spots for M&A activity, with more than 20 deals in each state. Other strong states include Colorado, Florida, Massachusetts, Minnesota, New Jersey, North Carolina, Pennsylvania, Virginia, and Washington.

More than half (56.2 percent) of U.S. deals involved a buyer and seller from different states.

More than a quarter (28.4 percent) of global deals involved publicly traded buyers.

The most active buyers were those with specialties in the general building, transportation, power, and oil & gas/industrial sectors. Firms in greatest demand were those working in the general building, oil & gas/industrial, transportation, and water supply markets.

Morrissey Goodale Principal Consultant Neil Churman expects M&A activity will continue to grow in the coming year. “Mergers and acquisitions will have a record year in 2015 and will increase some 25 percent over 2014,” he says. “The industry is at a tipping point from a consolidation perspective. High-performing firms in hot markets and geographies will command record valuations.”

Morrissey Goodale’s complete 2014 AEC M&A Year in Review and an interactive map of M&A activity in the United States can be found at www.morrisseygoodale.com.