Who do you think will be bought out next?
Have you looked around in the last couple of weeks? Mergers are going on hot and heavy. From what I am hearing on the street, there are more to come. I believe some of the stalwarts of the civil industry could be eaten up next. Take a look at some events that have been recently announced:
- CDI of Pennsylvania has acquired L. R. Kimball also of Pennsylvania. Kimball will now be known as L. R. Kimball, a CDI company. June 2010
- Hexagon has acquired Intergraph of Alabama. July 2010
- Hankins and Anderson, an engineering firm based in western Henrico County with offices in Virginia Beach and San Diego, has recently merged with CMSS Architects of Virginia Beach. The merger, formed H&A Architects & Engineers, with its headquarters in Henrico. April 2010
- J. Kenneth Fraser and Associates, a third-generation family-owned civil engineering firm in Rensselaer, N.Y., has merged with the much larger Weston & Sampson of Peabody, Mass. April 2010
- The engineering firm Wilkison & Associates Inc. has merged with WilsonMiller Inc. June 2010
- Design firm Stantec Inc., headquartered in Edmondton, Alberta, Canada, announced on July 20 that it has signed a letter of intent to acquire Naples, Fla.-based WilsonMiller Inc., a planning, design and engineering company that has more than 265 employees in 10 offices throughout the state., July 2010
- Vanasse Hangen Brustlin, Inc. (VHB), a planning, design and engineering firm with Southeast headquarters in Orlando, announced today the merger between VHB and MSCW, the Orlando-based planning and engineering firm. April 2010
- Surveying and site design services firm Wightman Ward Inc., of Portage, said Thursday that it is consolidating services with Wightman & Associates Inc., an engineering, architecture, surveying, environmental and construction inspection firm based in Benton Harbor.
- Engineering firm Alfred Benesch & Co. recently announced the company will merge with Lincoln, Neb.-based HWS Consulting Group (HWS). July, 2010
So, more to come? When I see companies that are normally robust and seeking services and new technologies suddenly stop everything, I see warning signs. We have been working with two notable firms in the Mid-Atlantic lately, and I noticed that in the last two months their management has disappeared from daily work. There is a lot of secrecy occurring in conversations where I am being told to come in and speak with them privately. So, yes, there are more mergers and acquisitions coming. Keep your eyes and ears open.
This is an event that is even kept from staff because of the potential ramifications. Good ones will jump ship so as to not be overlooked or trumped by a senior player in the acquiring company. Clients may join these staff members as they jump ship, because they will be fearful that fees of the new larger company will increase due to increased overhead. Others may feel they aren’t large enough to be properly served by the new behemoth.
I notice that a good takeover company is one with outdated equipment, software and technologies. Anytime the revenue per employee falls under $50-75K/year, the company becomes a takeover candidate. The new firm only has to upgrade some equipment, throw a little training at the staff and their project’s profits will jump nicely.
I find it very poor business when a company has to be taken over before they see the fallacy of not keeping at least somewhat current in technologies.
You will notice that some leading companies have upped the ante lately with technological acquisitions, ones that provide them with a proprietary advantage over their competitors. This also helps them ward off competitors coming expanding in from other regions; look at Langan Engineering and Environmental opening new offices in Pennsylvania. Look at Ware-Malcomb opening in new offices on the east coast. Each of these firms has brought in new technologies for 64-bit computing, automating planning and cloud computing. These have to be done just to stay in business. I just noticed that Adobe Creative Suite 5 shipped a couple months ago and it ONLY supports 64 bit operating systems, so you can’t sit still!
So my initial assessment is that if your firm is healthy, upgrading technologies, using technologies to gain or maintain an edge of the competition, then you are likely not going to be bought out. If on the other hand, your firm is still using 4-5 year old CADD software, if they haven’t conducted training in years, if they are not bringing in new technologies, appear to have stagnated and are hurting for new projects, or generally are existing under a cloud of malaise, then they might be a buyout candidate.
Where does your company stand on these concepts? Who do you think will be bought out next?
Originally posted by Harry Ward on Technology Benchmark Jul 28, 2010 2:28 PM EDT; updated Aug. 4