November 22, 2005
Design giant AECOM is acquiring EDAW,
the big planning firm, ENR has learned.
AECOM Technology Corp., Los Angeles,
is finishing up final details of a planned acquisition of
EDAW Inc., the San Francisco-based architect-planner. It will
give AECOM a foothold in the fast-growing global market for
project master planning, according to officials of both firms
who confirmed the deal.
Neither the purchase price nor other financial details of
the transaction were released, but one official says it involved
a combination of cash and stock. The transaction will allow
EDAW management access to shares of the larger AECOM company
and permit more EDAW staff down the ladder to become company
Sources say EDAW had other suitors, but Amanda Walter, EDAW's
communications manager, would not identify them. "We
were approached by several firms," she says.
AECOM is the industry's third largest design firm, reporting
nearly $2.1 billion in global design revenue in 2004, according
to ENR's Top 500 Design Firms, with 22% in buildings-related
work. AECOM has been growing through acquisitions steadily
over the past five years and at one point considered a public
stock offering before pulling it back. This summer, AECOM
acquired environmental engineer ENSR International, Westford,
Mass. AECOM has contracting operations, too. Last month, AECOM
decided to buy most of the assets of Cleveland-based The Austin
Co. following a bankruptcy filing by Austin. This would boost
the companys market share in design-build services.
EDAW is ranked 67th on that list, reporting $137.5 million
in design revenue. About 21% of the firm's total is from the
building market and the firm also performs much landscape
design and environmental services.
The company has over 1,000 staff members and is no stranger
to its own acquisitions, having absorbed nine other firms
Officials say both company boards have approved the deal
and that it has already been communicated to their respective
employees. Company's shareholders have not yet voted on the
transaction, says Walter.
One senior AECOM official says the firm currently lacks a
strong planning function. "EDAW has that in a big way,"
he says, with strong credentials in Australia, the U.K and
China. "Our two global footprints match, and EDAW offers
an early look into projects. We've been pushing for a planning
acquisition for a long time."
Among other things, EDAW has advised London development officials
since 2003 on planning for the 2012 summer Olympic games,
which the city went on to win earlier this year. The firm
is now proposing to do the actual master plan.
"We were looking for additional resources for large
jobs," says EDAW's Walter. "AECOM already has offices
where we need to grow." She notes that EDAW recently
opened an office in Singapore, where AECOM is already located.
EDAW will become another AECOM operating company, with Joe
Brown, its president and CEO, joining AECOM's board.