EBJ Announces Top 10 Transactions in U.S. Environmental Consulting & Engineering Industry

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News Release -- San Diego, Calif. -- Environmental Business International Inc., publisher of Environmental Business Journal (EBJ), has published its annual list of top 10 mergers and acquisitions (M&As) in U.S. environmental consulting & engineering (C&E) in 2015.

Purchase EBJ 2016 M&A Edition (48 pp., 31,000 words, 25 charts, list of top deals plus profiles, analysis and perspective) for $250

Last year saw a record 224 deals in Environmental Services, to which environmental C&E firms contributed 101 transactions, up 10% compared to 2014. However, there were fewer multi-billion dollar deals compared with 2014, which saw the merger of AECOM-URS, WSP-Parsons Brinckerhoff and AMEC-Foster Wheeler.

By contrast, EBJ's list of Top 10 2015 Transactions in Environmental Consulting & Engineering included only one billion-dollar deal: the purchase of ERM by OMERS Private Equity from Charterhouse Capital for an enterprise value of $1.7 billion. Most of the largest deals across the environmental industry in 2015 were in the $300-400 million range, including Trinity-Levine Leichtman, Intertek-PSI, Atkins-EnergySolutions and CH2M's private equity capitalization.

"The absence of mega-deals in environmental C&E in 2015 is partly because there are now relatively few billion dollar companies for large strategic acquirers left to buy," noted Grant Ferrier, the publisher and editor in chief of EBJ. "EBJ's list of top U.S. C&E firms by revenues now ranks only ERM, Golder Associates, and CDM Smith as billion-dollar U.S. companies with substantial environmental practices that would make the billion threshold. Similarly, in Europe only a few European firms match the profile for a big deal."

A mega merger valued at $795 million recently announced between Stantec Inc. and MWH Global Inc. doesn't quite make the billion dollar club but has further consolidated the ranks of the environmental industry's largest players this year.

Gradual consolidation in a naturally/historically fragmented industry
According to EBI data compiled on the environmental revenues of more than 500 environmental C&E firms each year, 6 firms now generate a billion dollars or more in environmental revenues.

Firms with over $100 million in environmental revenues grew from one third of the environmental C&E industry in 1990 to two thirds in 2012, according to EBI. Firms with more than $100 million in environmental revenues numbered 30 and averaged $212 million in environmental revenues in 1992, but this part of the C&E industry grew modestly to only 46 firms in 2014 and now averages $468 million in environmental revenues. "This indicates that while consolidation has indeed occurred, it has not happened as fast or as completely as in other industries, leaving considerable scope for further M&A," said Ferrier.

EBI believes M&A activity will continue at high levels over the next several years. "The U.S. environmental C&E business has consolidated significantly over the last 20 years but it has been gradual consolidation rather than rapid or wholesale consolidation," observed Ferrier. "Having said that, the environmental industry is characterized by the local nature of much of its work and still presents opportunities for small firms and for new owners as prinicipals strike out on their own. Experts agree that a certain degree of fragmentation will always exist in the industry."

Private equity makes a strong showing in 2015 deal list
Among 2015’s most notable deals were those in which existing private equity investors in environmental C&E firms were bought out by another financial firm. Private equity deals ranked 1, 3 and 5 on EBJ’s list of Top 10 2015 Transactions in Environmental Consulting & Engineering:

  • OMERS Private Equity, the private equity arm of Ontario's Municipal Employees Retirement System, acquired ERM from Charterhouse Capital for an enterprise value of $1.7 billion, becoming EBJ's top ranked deal.
  • Levine Leichtman Capital Partners acquired Trinity Consultants from Gryphon Investors for $388 million, becoming Trinity's third PE partner and EBJ's third listed deal.
  • CH2M took on financial partner Apollo Global Management in 2015 to support ongoing obligations to buy out retiring employees and to provide more opportunities for growth through acquisition. EBJ's fifth ranked deal.
  • Other PE-owned companies recently making moves in the in the industry include Trow/EXP, Englobe, CHA, Apex, Montrose and EN Engineering.

The second largest deal in 2015 was WSP Global’s acquisition of Canadian firm MMM Group Ltd. in a $425 million deal focused on transportation, infrastructure and environment, buildings and public-private partnerships.

Purchase EBJ 2016 M&A Edition (48 pp., 31,000 words, 25 charts, list of top deals plus profiles, analysis and perspective) for $250

For comment and access to research, contact:
Grant Ferrier, President, EBI Inc.
619-295-7685 ext 15
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For assistance and support, contact:
619-295-7685 ext 13
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