2018 Fall issue of Horizons

Annual U.S. Total Construction Spending

$94 trillion on infrastructure by 2040 to meet demand.” Based on this forecast demand, M&A activity should continue to increase in the infrastructure niche. GCs have not historically been attractive acquisition targets, however as they look to diversify revenue streams and integrate business lines, the acquisition of a specialty contractor could make sense. RubinBrown is seeing more of these deals throughout the country, helping GCs increase margins by self-performing certain work while diversifying their revenue streams. Similar to the cyclical nature of the construction industry, it is not expected that the increased activity will continue in perpetuity. However, both the M&A and private equity space offer new avenues for construction firms to divest, diversify and grow. These opportunities should continue to be an attractive option while the economy is strong.

$1,300

$1,200

$1,100

$1,000

$900

$800

CONSTRUCTION SPENDING (MILLIONS)

$700

$850.5

$906.3

$1,005.6

2015 $1,113.6

2016 $1,191.8

2017 $1,246.0

2012

2013

2014

Source: U.S. Census Bureau

The activity has continued into 2018 with Granite Construction and Layne Christensen Company announcing a $565 million deal. Given the world’s growing population and aging roads and bridges, the need for construction firms with a focus on infrastructure continues to grow. FMI’s report also indicated, “the world will need to spend

CONSTRUCTION SERVICES GROUP

RubinBrown provides services to general contractors, specialty subcontractors and related companies in the construction industry. For more information, visit www.RubinBrown.com/Construction .

Ken Van Bree, CPA, CGMA Partner-In-Charge Construction Services Group 314.290.3429 ken.van.bree@rubinbrown.com

Mark Jansen, CPA, CGMA Partner Construction Services Group 314.290.3208 mark.jansen@rubinbrown.com

Matt Beerbower, CPA Partner Construction Services Group 303.952.1252 matt.beerbower@rubinbrown.com

Chris Daues, CPA Manager Construction Services Group 303.952.1276 chris.daues@rubinbrown.com

Chris Coleman, CPA, CCIFP Partner Construction Services Group 314.290.3263 chris.coleman@rubinbrown.com

Major Consolidation in the Construction Industry

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