US engineering giant Aecom is preparing to launch a $3.5bn acquisition spree, expecting a surge in demand for road, rail and energy projects as President Donald Trump’s plan to spend $1 trillion on infrastructure takes effect.
Michael Burke, the company’s chief executive, made the remarks during an interview with Bloomberg on Monday, 6 March.
"We’ll look to be the largest infrastructure firm in the world, both for construction and design," he said. "I’ve got to spend $3.5bn, and we think it’ll be spent on good, solid strategic acquisitions. We will grow organically also."
Aecom became the largest design engineer in the US following its $4bn purchase of rival URS in July 2014, but has bought only two small consultants since then.
The company’s buying power has been 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 maintained that level.
We don’t know what the plan will look like, but we do know that it will have broad support across Washington and it will take the form of a wide array of initiatives– Michael Burke, Aecom chief executive
Investors’ confidence in the coming infrastructure boom is bolstered by the fact that it appears to have bipartisan support at every level of the US executive and legislature, although individual schemes, such as California’s high-speed rail system, are still opposed by Republicans in Congress, whereas others, such as the Mexican border wall, are opposed by Democrats.
So far, large US construction companies have not shown any interest in helping to build the wall. Bechtel, CH2M and Aecom are among those who have indicated that they will not be taking part.
Burke told Bloomberg TV that he expected that President Trump’s plan to spend $1 trillion on infrastructure would be put in place over the course of 2017.
He said: "We don’t know what the plan will look like, but we do know that it will have broad support across Washington and it will take the form of a wide array of initiatives."
He added that the Trump plan is likely to rely heavily on private sector cash through public-private partnerships (PPPs).
"This is something that we have long championed at Aecom and something that has worked very well in other economies around the world," he told Bloomberg. "We’ve seen public-private investment in Australia, Canada, the UK and across Europe, and we in the US have not taken as much advantage of it."
He said that PPP was associated with toll roads and other kinds of "user pay" infrastructure, but that it could be extended to energy, and social infrastructure such as court houses.
Image: Aecom’s Big I interchange in Albuquerque, New Mexico (Aecom)