Keeping its promise to go on a buying spree, US engineer Aecom is to buy Californian civil engineering contractor Shimmick Construction (SCCI) for $175m in a bid to capture an expected boom West Coast infrastructure.
Oakland-based SCCI is the 200th-largest construction firm in the US, according to Engineering News-Record. It works across the civil engineering spectrum and its present order book adds up to around $1.4bn.
Among its recent projects are an $875m expansion of Honolulu’s elevated railway system and more than a decade of repair work on the Golden Gate Bridge in San Francisco.
Michael Burke, Aecom’s chairman and chief executive, called the acquisition a "critical next step" in capitalising on the West Coast infrastructure boom, saying "governments and their constituents have approved hundreds of billions of dollars to improve infrastructure across the Western US".
SCCI’s track record as a design-build contractor was attractive because half of all large non-residential projects were delivered using this procurement method, he said.
Aiming to be the largest infrastructure firm in the world, Aecom said in March that it would spend up to $3.5bn on acquisitions in preparation for an expected increase in US spending on infrastructure.
Burke said at the time: "I’ve got to spend $3.5bn, and we think it’ll be spent on good, solid strategic acquisitions. We will grow organically also."
The company’s war chest was boosted by Donald Trump’s shock election victory in November. Its share price shot from $28 to around $38 the day after the result was announced, and has since found its level at between $32 and $33.
As well as the expected increase in federal funding, voters in the states of California and Washington have approved ballot measures that call for around $180bn in infrastructure investment, and California recently approved another $52bn for road repairs. California’s infrastructure market is expected to grow in double digits annually for the next several years.
Image: A rendering of Shimmick’s Honolulu guideway (Shimmick)