The deals never seem to end.

The managers of Hillier Architecture, the big Princeton, N.J.-based design practice, have decided to sell the company, sources have told ENR’s Debra Rubin. The company, which declines to confirm the possible sale, has been on the block for some time, industry sources say.
If true, the reported sale of Hillier, which had $69 million in 2006 revenue would be another big deal in a spring already cluttered with blockbusters by AECOM and URS.

Such as AECOM’s $470-million initial public offering, one of the biggest on Wall Street this year. That company still is in its quiet period but at a recent investor conference AECOM executives noted that the company competes with Fluor, Jacobs and URS and with CH2M-Hill and Montgomery Watson on the environmental side. AECOM executives are looking to beef up their environmental business and are likely to be sifting plenty of prospectuses from potential sellers.

Whether the AECOM employees will enjoy the gyrations of the equity markets remains to be seen. I’m sure many who cashed out some of the $200 million in employee-owned stock are happy. The selling opportunity for employees, some of whom had too much of their money tied up in AECOM stock, has always been a key driver behind AECOM’s multi-year effort to become a public company.

Now AECOM, with the sale of the company-issued stock, has an even bigger warchest for acquisitions.

The consolidation possible at the top of the industry appears limitless. AECOM hardly had time to bask in the glow of its successful IPO before news media carried word on Memorial Day of another deal, URS’ surprising acquisition of Washington Group International. Martin Koffel, URS chairman and chief executive, could have retired when his employment contract was set to expire at the end of 2006. But URS directors convinced him to stay, and added incentive with an additional $3 million worth of URS stock. Born in Australia, Koffel has preferred to let his company’s performance and his skill at dealmaking speak for itself.
Do you think the URS acquisition of WGI will be as beneficial to the firms as their executives predict? You can give us your opinion in an ENR.com forum.

Keep your eyes on this space for news of more deals.

July 19, 2007

As the large engineering firms get bigger, they lose touch with the clientele. Bigger, is not always better except to corporate managers who have lost touch with reality!

Public clients want and deserve personal attention to the projects they tender. Small and medium-size firms have an excellent opportunity to take projects away from the giant monsters being created by the leaders of URS and AECOM.

Jack Ybarra