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M&A Activity in 2020 Overshadowed by Covid-19

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M&A Activity in 2020 Overshadowed by Covid-19 Vol. XXXIII, Numbers 3/4 2020 M&A in the Environmental Industry 2020 Environmental Business International Inc. Inside EBJ: Environmental Industry M&A in 2020-2021 M&A ACTIVITY IN Merger & Acquisition the Environmental Industry takes a back seat to coronavirus 2020 OVERSHADOWED response, but analysts concur that activity is unlikely to be much shaken given an BY COVID-19 CRISIS expected recovery; Data on key indicators, M&A activity and valuations ........... 1-11 AEC Advisors expects M&A activity to continue after COVID-19 lull; Colliers major- hen the world came crashing down, ity stake for Maser is a case study in Real Estate and C&E partnership; Divestitures in the economy was on a record run W season as firms seek better fits and focus on core markets ....................................... 12 of growth. When the world came crashing down, the stock market was at record highs. Morrissey Goodale sees AEC M&A reach new heights in 2019; 2020 outlook .... 20 When the world came crashing down un- 2020 Environmental Group sees buyer interest in water & infrastructure; Expects a employment was at record lows. When V-shaped recovery; COVID-19 a force majeure event so values may not suffer ....... 22 the world came crashing down, consumer confidence and consumer spending were at ROG + Partners expects to see one or two quarters of ‘non-recurring’ under perfor- record highs. When the world came crash- mance will re-set the M&A market in architecture & engineering ......................... 25 ing down, construction activity was at near Houlihan Lokey’s environmental services practice benefits from steady growth, cycle record highs. resistance and non-discretionary nature of the environmental industry .................. 27 When the world came crashing down, Matheson Advisors shares its expertise in middle market valuations and M&A; Notes the global machinery and supply chains of the rapid shift to a ‘buyers market’ in 2020; Perspective on ESOPs ........................ 29 manufacturing were whirring away with EFCG clients looking ahead to ownership transition, growth and M&A ............... 36 little to concern them despite having been shaken at its foundation by trade disputes Brown Gibbons Lang & Company sees tailwinds into 2020 but COVID-19 and oil from the top—with globalization itself & gas lead to a ‘different’ year in Environmental & Industrial Services M&A........ 39 under siege from social unrest from labor, BMO Capital Markets weighs the balance between IPO and sale for its larger clients; protectionists and greens. When the world Welcomes the arrival of new generation of private buyers into the market ............. 42 came crashing down, power use had pla- Sandberg Consultants stresses the importance of management preparation and inte- teaued at a record high, as had the growth gration planning to success in M&A for mid-sized and smaller companies ............ 44 of energy productivity or economic output per unit of power or energy consumed. US Ecology tops $1 billion in revenue with NRC deal; Safety & decontamination services well suited to COVID-19 world and post-COVID business environment ..... 46 When the world came crashing down, government spending was at a record high RSK keeps up a brisk M&A pace to rank as #3 firm in the UK; Grows on the conti- and the federal deficit was at a record high. nent with M&A in Germany and Italy .................................................................. 49 When the world came crashing down, NV5 adds nine companies and $200 million in record M&A year in 2019 ........... 51 state and municipal governments were SLR continues ambitious growth strategy with more M&A; Passes $200 million and mostly flush with cash—anticipating a $60 million in USA revenues with New England acquisition of MMI ................... 53 steady stream of tax receipts, and feeling pretty good about their financial situation LaBella Associates M&A adds contracting in NY and environmental in PA; Seeds and the list of infrastructure projects they new waste & recycling practice .............................................................................. 56 were planning to undertake. Barr Engineering completes 5 acquisitions in last 5 years after 4 in its first 45 years; When the world came crashing down, Strengthens its natural resource focus on power, mining, fuels and water ............... 58 the price of crude oil prices had settled Farallon Consulting relies on strong corporate culture & ‘The Farallon Way’ to initi- into a relative new normal near $50 a ate M&A; Completes its first acquisition in 2019 .................................................. 61 barrel for much of 2019, but was already Clairvest completes sixth investment in solid waste & recycling: C&E next?; Pritzker showing signs of starting to crack from Private Capital puts Valicor on fast forward; Dar Group a global A&E player from global production and supply imbalances the Middle East; Montrose keeps up the M&A pace with acquisition of CTEH and — or was it a burgeoning understanding support from investor partner GFI/Oaktree .......................................................... 63 and almost accepting of a growing portion of the global investment community that Solid waste industry consolidation continues with leaders old and new extending fossil fuels are on a slide to oblivion. market positions; Updates on Waste Management and GFL IPO ........................ 67 Environmental Business Journal, Volume XXXIII, Numbers 3/4, 2020 U.S. Unemployed by Industry: April 2019 vs. April 2020 (thousands) EVERY SECTOR HIT 5000 BY UNEMPLOYMENT 4500 4000 he U.S. Bureau of Labor Statistics 19-Apr T(BLS) reported that total nonfarm 3500 payroll employment fell by 20.5 million 3000 20-Apr in April 2020, and the unemployment rate 2500 rose to 14.7%, with particularly heavy job losses in leisure and hospitality. The overall 2000 unemployment rate increased by 10.3 per- 1500 centage points from 4.4% in March, and the number of unemployed rose by 15.9 1000 million to 23.1 million in April. 500 BLS also reported the labor force par- 0 ticipation rate decreased by 2.5 percentage points over the month to 60.2%, the low- 19-Apr est rate since January 1973 (when it was Construc4on Financial 60%). Total employment fell by 22.4 mil- Manufacturing Informa4on lion to 133.4 million. The employment- Wholesale & Retail Transpo & U4li4es Ag./related Other services Government population ratio, at 51.3%, dropped by Prof & Biz services Ed & Health Services Leisure & hospitality 8.7 percentage points in April 2020, the lowest rate and largest over-the-month Source: Bureau of Labor Statistics, a unit of the United States Department of Labor decline in the history of the series dating Professional and business services back to January 1948. dustry for the near future looks to be on shed 2.2 million jobs in April. Sharp shaky ground, as economic uncertainty Employment falling by 20.5 million in losses occurred in temporary help services is causing public and private developers April, compares to a decline of 881,000 (-842,000) and in services to buildings to rethink their projects as debts mount. in March. April employment in leisure & and dwellings (-259,000). 975,000 con- On the architecture & engineering side, hospitality plummeted by 7.7 million, or struction workers lost their jobs in April, 85,200 jobs were lost in April. This also 47%, with most of the decrease occurred with specialty trade contractors bearing shouldn’t come as a surprise as firms enact in food services and drinking places (-5.5 the worst losses (691,000 jobs) and build- furloughs to keep their costs down while million); the arts, entertainment, and rec- ing construction lost 206,100. Unemploy- facing their own uncertainty as even civic reation industry (-1.3 million); and in hos- ment in construction was 16.6% in April and institutional projects, long thought of pitality (-839,000). (Note: Employment 2020, higher than the national average as safe harbors for architecture practices, figures differ from the ‘unemployed’ num- and up from 6.9% in March 2020. Con- have begun implementing project freezes. bers portrayed on the chart and the table.) struction analysts acknowledge their in- Employment declined by 2.5 mil- Environmental Business Journal ® (ISSN 0145-8611) is published by Environmental Business lion in education and health services. In International, Inc., 4452 Park Blvd., #306, San Diego, CA 92116. © 2020 Environmental health care, employment declined by 1.4 Business International, Inc. All rights reserved. This publication, or any part, may not be million, led by losses in offices of den- duplicated, reprinted, or republished without the written permission of the publisher. tists (-503,000), offices of physicians To order a subscription, call 619-295-7685 ext. 15 or visit us online at ebionline.org/ebj. (-243,000), and offices of other health care A corporate electronic subscription with internal reproduction license and access to data practitioners (-205,000). Employment also files starts at $1,250 and allows up to five registered users with rates increasing in five user declined in social assistance (-651,000), re- increments. Individual editions or discounted corporate subscriptions are available for firms flecting job losses in child day care services with under 100 employees. (-336,000) and individual and family ser- vices (-241,000). Employment in private Editor in Chief, Grant Ferrier Federal Analyst, Andrew Paterson education declined by 457,000. Govern- Research Manager, Laura Carranza Managing Editor, Lyn Thwaites Writers George Stubbs & Jim Hight Research Analyst, Anika Rohlfe ment employment dropped by 980,000 in April. Employment in local government EDITORIAL ADVISORY BOARD was down by 801,000, in part reflecting Andrew Paterson, Chairman; James Strock, Founder, Serve to Lead; Steve school closures. Employment also declined Maxwell, TechKnowledgey Strategic Group; P.S. Reilly, President, NextGen Today; in state government education (-176,000). Dr. Edgar Berkey; Paul Zofnass, Environmental Financial Consulting Group 2 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIII, Numbers 3/4, 2020 U.S.
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