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O P I N I O N
Strategic decisions In a hot M&A market, the opportunity to sell is there, but staying put could also be a good path to take.
T he activity with mergers and acquisitions is quite high. There seem to be more companies getting together that range from the Jacobs and CH2M deal to the much smaller regional transactions. Much of this activity is driven by the strong economy, desire for companies to move into strategic markets, expand their service offerings, extend their geographic reach, or the need to simply deepen the talent bench. The strong financial and cash position of many companies is providing them with the capacity to make these acquisitions more readily.
Gerry Salontai GUEST SPEAKER
The trend of the very large and global mega serial consolidators might be driven by the desire to create the “master builder” company – serving very large clients and programs, particularly in the government sector, providing cradle-to-grave capabilities. This trend is driven by the rise in popularity of large-scale program management, engineer procured construction, design-build, and public-private partnerships. Each of these requires large staff resources, construction capability, and/ or the ability to bring financing to the client. Or some argue these very large to mega companies just need to acquire to keep the revenues growing because internal growth has slowed significantly. Whatever the reason, the big are getting bigger.
There is a belief there will only be mega companies at some point in the future. I’ve personally heard this theory for the last 25 years of my career – yet there continues to be plenty of small to midsized companies. And there’s plenty of smaller to mid- sized projects out there for these companies to work on. What may be most important is your strategic direction and the ability to take advantage of the changes in the markets. Many of the very large companies purposefully or sometimes inadvertently change their focus and thus leave a group of clients behind as they move into these
See GERRY SALONTAI, page 12
THE ZWEIG LETTER November 6, 2017, ISSUE 1223
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