Monthly Archives: May 2015

  • M&A Trends in Oil and Gas

    Posted on May 26, 2015 by FMI Corporation

    Shale gasThe energy infrastructure market has gone through a period of unprecedented expansion over the past five years and many companies exhibited exponential growth over this period. Only six months ago, most companies were preparing strategies for talent acquisition/retention and geographic/service line expansion. With the price of oil falling by more than 50 percent, many firms are being forced to cut costs and reevaluate strategy. The decline in oil prices has forced many producers to cut 2015 drilling capex. As a result, demand for upstream services, in particular, will begin to slow and margins will compress. Midstream and downstream markets will also be affected, but likely not until later in the year or until production begins to decline in earnest.

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    This post was posted in Investment Banking, Research and was tagged with Scott Duncan, Inc.

  • Construction Materials

    Posted on May 19, 2015 by FMI Corporation

    ConstructionMaterials497268779Small, strategic, bolt-on acquisition and corporate divestitures dominated M&A activity in 2014 in the construction materials segment of aggregate, asphalt and ready-mixed concrete producers. These small, strategic transactions were successful because the strategic benefits of the deal resulted in pricing that satisfied both buyer and seller. These deals were often among competitors with all the typical benefits associated with eliminating local competition. Additionally, there were continued planned divestitures by some of the major players in the sector to continue balance sheet management to raise capital for targeted acquisitions. We also saw the return of growth acquisitions in new markets for select players.

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    This post was posted in Investment Banking and was tagged with Mergers and Acquisitions, NRCI 2014 Q2

  • FMI's M&A Trends: Engineering and Construction

    Posted on May 11, 2015 by FMI Corporation

    ConstructionSiteBuildings178633737Large, transformational deals defined M&A activity in the integrated engineering and construction (E&C) sector in 2014. The fallout from these acquisitions — some of which had been several years in the works — will spur continued activity into 2015. While we do not believe 2015 M&A activity will surpass that of 2014, we do believe integrated E&C firms (especially the largest firms) will continue to look to acquisitions as a conduit for growth and margin expansion.

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    This post was posted in Investment Banking

  • How to Capitalize on Market Information

    Posted on May 5, 2015 by FMI Corporation

    InvestmentBanking494507603Most successful companies in the oil and gas engineering and construction industry are constantly monitoring the market and staying abreast of the most recent trends. They try to best prepare for what the future will look like in the market and how the company will compete. One of the lessons FMI has learned is that market research must be placed in a proper strategic framework to guide your thinking and ultimately increase your ability to make the right decisions for your company’s future success. Without this framework, it is simply a collection of data points without a unified purpose. As seen in Exhibit 1, the strategic framework we suggest to our clients for implementation is the 4-C approach of climate, customers, competitors and company.

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    This post was posted in Investment Banking, Research and was tagged with Strategy, Oil and Gas Infrastructure Valuations

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