WSP, Jacobs, Skanska, STO announce deals, acquisitions | Dump Trucks Charlotte NC

While residential construction has flourished during the pandemic, the prospects for the commercial sector have dimmed amid uncertainty of new deals going forward, despite the industry’s essential status.

That means companies with cash are seeing opportunities to build market share or expand into new areas, while those on the block are benefiting from the relative stability of hitching their future to larger, more capitalized buyers. Still others are selling periphery units in order to focus on core capabilities.

Here’s a roundup of recent noteworthy transaction news:

WSP Global, Golder Associates

Montreal-based WSP Global announced it will buy Ontario, Canada-based environmental consulting specialist Golder Associates for $1.14 billion in cash.

The deal will push revenues from WSP's earth sciences and environmental consulting services to account for approximately $2 billion, or 25%, of its total $8 billion in pro forma net revenues, the columbus oh dump truck company said in a release.

Meanwhile, it gives Golder Associates, which has 7,000 employees and operates in 30 countries, backing from WSP’s deep pockets as the firm pushes more aggressively into the $1.25 trillion environmental market.

“The combination ideally positions WSP to capitalize on the rapidly growing ESG (environmental, social and governance) trends driving demand for environmental services and sustainable infrastructure development,” said WSP CEO Alexandre L’Heureux in the statement.

Earlier in 2020, WSP had been rumored to be considering acquiring Los Angeles-based AECOM, which highlighted the strength of its own environmental services group on its most recent call with investment analysts. On that call, AECOM CEO Troy Rudd talked about the increased interest clients were showing in environmental services, and the opportunities he saw with the incoming Biden administration’s focus on climate change.

STO Building Group, Abbott Construction

New York-based STO Building Group announced it will acquire West Coast commercial builder Abbott Construction to increase its presence coast to coast. The merger will allow both firms to leverage each other’s geographic reach to better serve clients with multiple locations and enhance the services and areas of expertise they can offer across that expanded footprint, STO said in a statement.

“The Pacific Northwest has been a key strategic market for the STO Building Group, and Abbott is a terrific addition to our family of companies,” said Robert Mullen, STO Building Group CEO, in a statement. “By joining forces, both firms can leverage each other’s geographic reach and take advantage of each other’s strengths, relationships, geographies, and resources to better serve our clients across the globe.”

Seattle-based Abbott will keep its identity, and its current leaders will retain an ownership position in the organization and maintain their roles as the senior leadership team of the business. It is anticipated that new job opportunities will be created as a result of the merger to support the company’s projected growth for 2021 and beyond, according to the announcement.

STO Building Group's expanding footprint to the West Coast mirrors a similar move made earlier in 2020 by San Francisco-based contractor Swinerton, which announced its plans to expand into the New York City office market, increasing its coast-to-coast reach.

Jacobs, PA Consulting

Dallas-based contractor Jacobs announced it’s buying a 65% stake in design- and technology-focused U.K.-based PA Consulting, which places an "enterprise value" on PA of $2.4 billion.

The remaining 35% of the PA Consulting will be held by PA’s employees, which it says total 3,200, following the exit of majority stakeholder The Carlyle Group, according to a Jacobs news release.

The consulting group, which has offices in Europe and the U.S., focuses on defense, manufacturing, government, health and life sciences, transport, energy, utilities and financial services. It has worked on the Virgin Hyperloop One project, with Ori Biotech on cell and gene therapy manufacturing and helped develop an artificial intelligence and machine learning system to predict failures in critical underground utility assets.

"Our partnership with PA forms a unique offering in the market that combines strategic front-end consulting and deep domain knowledge across key sectors with next generation science and technology expertise,” said Jacobs CEO Steve Demetriou in the statement. 

Skanska, M Group Services

Skanska is selling its U.K.-based highway and rail maintenance division to M Group Services for roughly $67 million, according to a news release. The business unit, which focuses on highway, rail and streetlight maintenance in the U.K., had revenue of 323 million GBP in 2019.

M Group Services is a leading provider of essential infrastructure services within the water, energy, transport and telecommunication sectors in the U.K. and Ireland.

The sale is a key part of Skanska’s strategy to focus on its core construction operations in the infrastructure and building sectors, according to the release.