Architecture Engineering & Environmental Services

May 2018

Sectorwatch

Private equity's interest in the AEC sector remains strong with several recent notable transactions occurring since early April. Among the notable deals, Long Point Capital sold CHA Consulting to First Reserve, Strength Capital acquired ESP Associates, and RTC Partners-backed Ardurra-King Engineering acquired E Co Consultants. With long-term opportunity in the infrastructure sector and considerable "dry powder" among private equity groups, interest in the AEC space is expected to continue for the foreseeable future.

 

Industry Trends:

  • Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
  • Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
  • Current EBITDA margin exceeds the average of the last 3 years EBITDA margin, a condition that may attract new entrants