AECOM Technology Corp. the parent of architecture and engineering giant Daniel Mann Johnson & Mendenhall and already one of Los Angeles' largest privately owned companies is going through a major expansion to take full advantage of the glut of infrastructure projects coming down the pipeline.
The company capped off a very busy year with the December acquisition of the transportation practice of KPMG Consulting LLC in Fairfax, Va.
This latest acquisition, which will enable the company to provide fully integrated transportation infrastructure services for its clients, follows two other major transactions earlier in the year: the March merger with London-based infrastructure design firm Maunsell, and the April acquisition from Vivendi of Metcalf & Eddy, a Wakefield, Mass.-based environmental consulting firm specializing in wastewater engineering.
As a result of these transactions, AECOM's projected revenue for 2000 will be $1.6 billion, up from $990 million in 1999. And that is not going to be the end of it, as both the federal government and local governments have earmarked billions of dollars to upgrade long-neglected infrastructure facilities.
"We want to be strategically positioned for changes in the industry and our acquisitions are made toward that end," said Raymond Holdsworth, president of AECOM. "Our objectives here, among others, are to balance our infrastructure work between transportation and wastewater services and to be a global provider of engineering services."
In recent years, local environmental authorities have become increasingly vigilant in enforcing the provisions of the federal Clean Water Act. Consequently, local industries and government agencies such as the California Department of Transportation, are forced to comply with, for example, stricter stormwater drainage provisions. The addition of Metcalf & Eddy, a brand name in wastewater engineering services, will make AECOM one of the key players in this growing field.
Likewise, the merger with Maunsell positions AECOM as one of the largest infrastructure design firms in the world, particularly in the Far East. If and when the Asian economies move into fast-growth mode in the coming years, as many people expect they will, the combined enterprise stands to reap the benefits from their dominance of that market.
"Right now Asia is down, but we still have 3,000 employees there," said Holdsworth. "In the next three or five years, it will come roaring back, and we want to make sure we have a presence there to take advantage of it."
The acquisition of KPMG's transportation consulting practice, which will become the AECOM Consulting-Transportation Group, will likewise fit in with AECOM's long-term strategy. Federal and state budget surpluses have made a lot of money available for badly needed and long-postponed infrastructure improvements. The Consulting-Transportation Group's area of expertise is to work with key government agencies to develop their long-term transportation plans.
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