AECOM Technology Corp. announced on July 29 its acquisition of Hunt Construction Group Inc., which boosts the design giant's construction capabilities now provided through its Tishman Construction unit that was purchased in 2010.
Based in Scottsdale, Ariz., Hunt was one of the first construction companies to position itself as a stadium and arena contractor.
The firm ranks at No. 4 on ENR's latest list of the top contractors in sports facilities, behind Austin Industries, Mortenson Construction and Turner Corp.
It also ranks at No. 9 among top contractors in hotels and convention centers, at No. 11 among entertainment-casino builders, at No. 19 in airport construction and among the Top 25 firms in health-care and manufacturing construction. Its backlog is about $4 billion.
ENR first reported the planned deal on July 22.
Purchase terms for privately held Hunt were not disclosed, but sources with knowledge of the deal believe it totaled about $100 million. Andrew Wittmann, construction and industrial sector research analyst for investment banker Robert W. Baird & Co., estimated the purchase price closer to $90 million in a July 30 report.
Michael S. Burke, AECOM president and CEO, confirmed on July 29 that talks had been ongoing for about one year.
The Hunt acquisition comes as AECOM is moving to ingest URS Corp., for which it announced a planned purchase on July 13 in a $6-billion cash, stock and debt-assumption transaction. That deal is set to close in October. Together, the purchases would create a firm with 95,000 employees and pro forma revenue of $20 billion, says AECOM.
Burke told CNBC on July 29 that the purchase was part of a "core strategy to create the premier fully integrated infrastructure firm in the world." He added, "Employees and clients were asking for it."
Hunt ranks at No. 45 on ENR's list of the Top 400 Contractors, with $1.2 billion in 2013 revenue and about 700 employees. The contractor also ranks at No. 21 on ENR's list of the Top 100 Construction Management-at-Risk firms, reporting $947 million in revenue in that sector.
“Hunt presents a compelling strategic fit for our business—combining its expertise in the sports, health-care and aviation markets with our construction services team’s recognized strength in the commercial tall-buildings, residential and hospitality sectors,” said Daniel P. McQuade, CEO of AECOM's construction practice and of the Tishman unit.
AECOM says Hunt Construction Group CEO Mike Fratianni and Chairman Emeritus Robert Hunt will retain their positions.
Recent Hunt Construction Group projects include Marlins Park in Miami, home of baseball’s Miami Marlins; and the Maynard H. Jackson Jr. International Terminal at Hartsfield-Jackson Atlanta International Airport.
Hunt also managed the construction of facilities at which AECOM provided design services, including the Barclays Center arena in Brooklyn, N.Y., and the Mayo Clinic's proton therapy clinic in Phoenix.
"With economic contribution materially less than headline revenue contribution would otherwise suggest, we expect focus to remain solely on the URS transaction," said Wittmann. "While we believe Hunt potentially increases integration challenges, a noted area of risk, we see Hunt as consistent with AECOM's broader CM-focus, with precedent at Tishman, more appropriately viewed as a "bolt-on" transaction, with [AECOM's] interest in Hunt pre-dating the URS negotiations."
