FMI’s 2019 M&A Trends for Engineering and Construction
Looking to the near future, we expect M&A activity to remain strong but likely to return to more regular levels in 2019 and beyond. In this year’s survey, nearly 60% of all respondents indicated that acquisitions were a part of their current strategy—down from 70% in last year’s survey. While significant buyer interest remains in the market, we expect acquisition levels to return to what they were back in 2017.
The M&A market remains quite strong for quality sellers, with plenty of appetite from both strategic buyers and private equity firms and improved valuations. Over three-quarters of all survey respondents believe that industry valuations have risen over the past 24 months, primarily due to the increased market activity and improved performance of target companies.
For most firms that have made acquisitions a part of their current strategy, the primary drivers are:
- The desire to grow and diversify their businesses.
- The ability to expand services/capabilities.
- The need to tackle a shortage of qualified labor.
