A/E mergers remains resilient despite weakening economy

Natick, Mass.—In spite of a weakening economy, ZweigWhite [zweiggroup.com] advisors continue to see significant interest in mergers and acquisition activity in the architecture, engineering, and environmental consulting industries. "Our data indicates that overall deal volume is down this year roughly 10 to 15 percent 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 mergers and acquisition 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 mergers and acquisition activity in other industries, has not had a profound effect on the A/E and 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), 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 Unites States as fertile ground.

Gido summarizes that "deals happen in both stronger and weaker economic environments, and when properly timed and planned, mergers and acquisitions continue to be an effective tool for both strategic growth and ownership transition in the design industry."