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Global Deal Value Rises in Third Quarter, Says PricewaterhouseCoopers

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The value of merger and acquisition deals among global engineering and construction firms rose to $13.03 billion in the third quarter of 2010, says financial services firm PricewaterhouseCoopers, New York City. The figure was up from $11.43 billion in the previous quarter, even though the number of transactions tracked dropped to 35 from 43. But the firm claims the value of “megadeals”—those worth at least $1 billion—more than doubled in the quarter, to $7.2 billion from $3.55 billion . Kent Goetjen, the firm’s E&C sector leader, credits the megadeal increase partly to “reduced capital constraints and low activity in 2009.” But he emphasizes that overall M&A activity “remains driven by smaller deals and transactions with undisclosed values.” Goetjen says “targets in Asia and Oceana” made up 43% of transactions valued at $50 million or more, with regional activity “primarily driven by China.” In the U.S., heavy contractor Layne Christensen, Mission Woods, Kan., announced on Nov. 18 that it had purchased Bencor Corp. of America, a Dallas foundation contractor for $32 million. Layne ranks 57th on ENR’s list of the Top 400 Contractors. Among engineers announcing deals, H.W. Lochner, Chicago, on Nov. 16 acquired Bucher Willis Ratliff, St. Louis. They rank at Nos. 143 and 401, respectively, on ENR’s list of the Top 500 Design Firms. Penhall International Corp., the industry’s leading demolition contractor that ranks 75th on ENR’s Top 600 Specialty Contractors list, now has a new private-equity firm owner.

The Nov. 19 sale of the Anaheim, Calif., firm by its previous equity owner, Code Hennessy & Simmons, is to Centerbridge Partners L.P. The deal “extinguishes” Penhall’s $279 million in outstanding debt and gives Centerbridge an 83% equity stake, says the demolition firm. Also announced earlier this month were deals involving E&C firms in Germany, Denmark and the U.K. MWH Global, the Colorado-based wet infrastructure E&C firm, said on Nov. 19 that it has agreed to acquire Biwater Services Ltd., a U.K.-based water construction and engineering firm. No transaction value was released, but the deal is set to close before the end of the year, says an MWH spokeswoman.

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