Insight

Industrial Services M&A update Q3 2021

Read more about the M&A activity in the industrial services sector.

Stephen Guy

Stephen Guy

Managing Director, KPMG Corporate Finance LLC

+1 410-949-8909

Engineering & construction services sector landscape

M&A Activity & Aggregate Deal Value: Q3-19 – Q3-21

  • Global aggregate M&A deal value for the Engineering & Construction sector decreased to $8.3bn in Q3-21, down from $14.9bn1 in Q2-21.
  • Relative to Q2-21, Q3-21 global M&A deal volume witnessed a decline of 5.0%
  • In Q3-21, reported U.S. Engineering & Construction aggregate M&A deal value totaled $3.2bn, up from $1.3bn in Q2-21. U.S. M&A deal volume increased 9.6% on a quarter-over-quarter basis
  • The U.S. accounted for 39.3% of global Engineering & Construction M&A activity in Q3-21, up from 34.1% in Q2-21
     

In Q4-20, China Energy Engineering Corporation Limited (SEHK:3996) acquired a 57.16% stake of China Gezhouba Group Company Limited (SHSE:600068) for $18.6bn, which comprised 59.6% of global aggregate deal value for the Engineering & Construction sector during the quarter.
In Q2-21, Brookfield Business Partners L.P. (NYSE:BBU) agreed to acquire Modulaire Group, for $5bn, representing 33.6% of global aggregate deal value for the Engineering & Construction sector during the quarter.


Engineering & Construction Services Public Company Sector Overview

Sector LTM Trading Multiples Description
TEV / Revenue TEV / EBITDA
Construction Contractors 0.37x 10.8x Providers of construction and general contracting services
Diversified Engineering & Construction 1.16x 13.6x Professional services firms offering a range of engineering, construction, and construction management services
Infrastructure Services 0.85x 12.3x Civil and infrastructure construction and engineering services
Specialty Engineering and Construction 1.30x 11.4x Electrical, mechanical, industrial, and environment engineering and construction services
Utility Services 0.95x 11.0x Electric power, energy, and utility engineering and construction services


Transportation & logistics services sector landscape

M&A Activity & Aggregate Deal Value: Q3-19 – Q3-21 

  • Aggregate global Transportation & Logistics sector M&A deal value totaled $84.5bn2 in Q3-21, up from $34.7bn in Q2-21
  • Over the same period, global M&A deal volume for the sector declined 7.5%
  • U.S. aggregate M&A deal value increased from $10.5bn in Q2-21 to $39.5bn2 in Q3-21, while U.S. M&A deal volume witnessed a decline of 8.3% during the quarter
  • In Q3-21, the U.S. accounted for 26.6% of global Transportation & Logistics M&A activity, which was down slightly from 26.9% in Q2-21
 

In Q3-21, Canadian Pacific Railway Limited (TSX:CP) submitted a proposal to acquire Kansas City Southern (NYSE:KSU) for $31.7bn, which comprised 80.3% of the U.S. aggregate deal value and 37.5% of global aggregate deal value for the Transportation & Logistics sector. 


Transportation & Logistics Services Public Company Sector Overview 

Sector LTM Trading Multiples Description
TEV / Revenue TEV / EBITDA
Logistics Providers 1.44x 12.9x Third-party logistics providers offering warehouse management, order fulfillment, and shipment services
Marine 3.09x 11.7x Ocean and marine freight transportation and logistics services
Rail and Rail Services 5.81x 15.0x Rail-based freight transportation services
Trucking 2.11x 9.5x Companies offering truckload transportation services


We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.


Footnotes

  1. In Q2-21, Brookfield Business Partners L.P. (NYSE:BBU) agreed to acquire Modulaire Group, for $5bn, representing 33.6% of global aggregate deal value for the Engineering & Construction sector during the quarter.
  2. In Q3-21, Canadian Pacific Railway Limited (TSX:CP) submitted a proposal to acquire Kansas City Southern (NYSE:KSU) for $31.7bn, which comprised 80.3% of the U.S. aggregate deal value and 37.5% of global aggregate deal value for the Transportation & Logistics sector.


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