EBJ News for May 30, 2019

May 30, 2019 – The Latest Trends in the Environmental Industry 

The Environmental Industry has experienced a boom in activity in recent years. On the business side, all major sectors have seen record M&A activity. This week’s EBI news highlights the latest transactions.

Tetra Tech acquiring WYG to expand UK operations

Tetra Tech Inc. (Pasadena, Calif.) has made a cash offer to acquire professional services firm WYG plc (Leeds, UK), valuing WYG at £43.4 million. The deal gives Tetra Tech a platform for growth in the UK and Europe and expands the firm’s global presence in international development. WYG had revenue of £75.3 million in the first half ended September 30, 2018 with a loss before tax of £0.8 million. WYG employs 1,600 staff, operating from more than 30 locations in the UK, Europe, Africa and Asia. “WYG’s expertise in infrastructure and program management, as well as water and environmental services, enables us to deliver innovative solutions to support the UK’s infrastructure needs,” said Dan Batrack, Tetra Tech chairman and CEO.


Mayors focus on climate change, infrastructure

In the context of federal inaction on environmental issues like climate change, mayors are increasingly prioritizing clean energy, local ways to reduce air pollution, and municipal recycling, according to the sixth annual State of the Cities report by the National League of Cities (NLC). Economic Development (74%) topped the list of issues talked about by Mayors, followed by Infrastructure (57%). Energy & Environment was fourth greatest concern (41%) after third ranked Health & Human Services (46%). Following the U.S. withdrawal from the Paris Climate Agreement in 2017, more than 400 mayors have committed to adopt the goals of the agreement.


GE announces 2GW in onshore wind orders

GE Renewable Energy (Houston) announced securing 2,010 MW in onshore wind orders in North America through May 2019. The 728 turbines will power the equivalent of more than 800,000 homes. The majority of orders were for GE Renewable Energy’s 2-MW platform, which will have a total installed capacity of more than 15 GW by the end of 2019. According to the American Wind Energy Assn., a record 35,000 megawatts were in the pipeline as of the end of 2018, a 23% increase over 2017. GE Renewable Energy was recognized by AWEA as the top manufacturer of wind turbines in the United States in 2018.


Record deal activity in E&C industry in 2018

FMI Capital Advisors Inc. (Raleigh, N.C.) reported record deal activity in 2018 in the engineering and construction (E&C) industry. Transactions were driven in part by baby-boomer retirements, coupled with heightened buyer interest. Emerging from the Great Recession, M&A deal count was relatively steady between 2010 and 2017, tracking 390 to 440 deals annually, FMI said. In 2018, 534 transactions were announced, a 26.5% increase over 2017 and “by far” the highest level of activity recorded by FMI. While M&A activity is expected to remain strong, it is likely to return to 2017 levels this year and beyond as buyers digest recent acquisitions and reset strategies in an altered competitive environment. Nearly 60% of respondents indicated that acquisitions were a part of their current strategy—down from 70% last year.

Stantec announces first quarter 2019 results

Stantec (Edmonton, Alberta) announced a solid performance for the quarter ended March 31, 2019, reflecting “continued focus on organic and acquisition growth,” according to President and CEO Gord Johnston. Stantec reported gross and net revenue of $1,151.5 million and $904.1 million, respectively, reflecting growth of 12.7% and 11.8%, with increases across all geographies. Organic net revenue growth was 2.5%, and acquisition net revenue growth was 6.6% compared to Q1 2018, mostly from the recent global acquisitions of Peter Brett Associates and Wood & Grieve Engineers.


Brown and Caldwell to manage water resiliency in Phoenix

Brown and Caldwell (Walnut Creek, Calif.) have been chosen to provide program management by the City of Phoenix as it seeks to supplement water supply in northern parts of the city. The $200 million program involves design and construction of four 60-milliongallonsperday booster pump stations, pressure reducing valve stations, and approximately 12 miles of conveyance pipelines to supplement the City’s existing water delivery system. The program team includes City staff, seven engineering design firms, and six Construction Manager at Risk (CMAR) delivery contractors. The upgraded system is expected to be fully operational by December 2022.


Helix Environmental acquires Foothill Associates

Helix Environmental Planning (San Diego, Calif.) has acquired Foothill Associates (Rocklin, Calif.), which will serve as Helix’s Placer County office, the firm’s sixth in California. The acquisition will allow Helix to better serve clients in Northern California. Founded in 1995, Foothill Associates is a veteran-owned California corporation providing environmental consulting, landscape architecture, and planning services to local governments, public agencies, and private clients. The acquisition also bolsters Helix’s capabilities related to biology, regulatory compliance, geographic information systems and CEQA and NEPA.


Woolpert expands geospatial services

Woolpert (Dayton, Ohio) has acquired Geomatics Data Solutions (Hillsboro, Ore.), a marine and terrestrial survey data firm. With this acquisition, Woolpert is establishing a Maritime Solutions market within its geospatial sector. “We are now able to provide highly accurate elevation data from land to the near coastal environment to underwater, seamlessly merging that data to address vital worldwide issues like coastal resiliency, sea-level rise and hundreds of other economic, environmental and social concerns,” Woolpert’s Geospatial Sector Leader Joseph Seppi said.


EPA begins Colorado Superfund mine cleanup

The U.S. Environmental Protection Agency (EPA) is beginning clean up at the Bonita Peak Mining District Superfund site in San Juan County, Colo. The EPA will begin interim cleanup actions at 23 source areas, with completion expected over the next three to five years. The agency first outlined the plan last June. The initial project will cost about $10 million and take up to five years, the agency said. The Superfund cleanup was prompted by the 2015 disaster at Gold King mine near Silverton, when 3 million gallons of wastewater contaminated rivers in Colorado, New Mexico and Utah.


Partnerships vital for APAC water and wastewater market

The emerging Asia-Pacific (APAC) water and wastewater services market is expected to grow at a compound annual growth rate (CAGR) of 5.82% between 2017 and 2022, boosting the market from $147.58 billion to $195.78 billion, according to a new report by Frost & Sullivan. The market is being driven by region-wide economic development, environment government policies, and the shift in global foreign direct investment towards Asia. The operations and maintenance sector is forecast to grow at a CAGR of 6.8% and design and engineering at 5.5%. To increase growth, participants need to partner with local players or invest in on-the-ground presence, the report concludes. Consolidation of the fragmented market is resulting in new business models such as water-as-a-service, treatment-as-a-service, and data-as-a-service, and the adoption of advanced technology services like predictive analytics.


CFC emissions traced to eastern China

Emissions of one of the worst ozone-depleting substances—CFC-11—increased last year despite a global phase-out since 2010 under the Montreal Protocol. Research by an international team of scientists revealed that emissions of CFC-11 from eastern China had increased by around 7,000 tonnes per year after 2012, particularly in or around the provinces of Shandong and Hebei. Modeling groups at University of Bristol, the UK Met Office, the Swiss Federal Laboratories for Materials Science and Technology, and MIT ran computer simulations determining the origin of the polluted air samples. CFC-11 was used primarily as a foaming agent for insulation, refrigerators and other consumer products. Global monitoring networks have been measuring CFCs in the atmosphere for over 40 years.


AEI acquires T.H.E. Engineers

Civil engineering firm American Engineers Inc. (Louisville, Ky.) has acquired T.H.E. Engineers Inc. (Lexington, Ky.), a civil engineering and environmental consulting firm providing structural and roadway design and environmental services. T.H.E. has provided environmental services to the Kentucky Transportation Cabinet since 1992 and to the coal industry for the last seven years. Services include permit applications, biological assessments, and stream and wetland mitigation design and monitoring.


Find out more about major trends in Environmental Industry M&A by downloading the presentations from our 2019 Texas Environmental Industry Summit.