July 2019

AEC Earnings Calls Synopsis – Q1 2019

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We are pleased to present our review and synopsis of results and earnings call commentary for Q1 2019. This summary includes the most recent financial results for key publicly traded companies in the Architecture, Engineering & Environmental Services sector for the period January – March 2019.

M&A Indicators:

• Digital transformation triggers M&A activity In efforts to reduce costs and increase productivity, AEC companies are transforming strategy to address the demanding digital age For example, NV 5 combined traditional construction and engineering services with technological expertise in their March purchase of The Sextant Group, an innovative technology solutions provider As a result, NV 5 leveraged operational capabilities in this competitive AEC market
• Geographic diversity continues to trend upward as a factor driving acquisitive strategies For example, in a recent 7 MA deal, Ajax Building Corporation consistently delivered growth year over year, but lacked an operational network outside southeastern United States With Ajax joining Structure Tone’s global network, the partnership diversified their client base and resources, but ultimately provided Ajax with business opportunities worldwide
• Increasing momentum for corporate and private buyers to make substantial investments In the AEC sector, the current revenue growth rate exceeds the average rate over the last 3 years, creating a healthy market for M&A For example, Charles L Harrington, the President CEO of the Parsons Corporation, explained that recent momentum is “Providing
  the financial flexibility to make continued investments for our [long term] strategy”