AECOM Technology means never having to say Architecture, Engineering, Consulting, Operations, and Maintenance. One of the world's leading engineering and design groups, AECOM provides planning, consulting, and construction management services for civil and infrastructure construction to government and private clients. It is a top design firm, operating in Asia, Africa, Europe, the Middle East, and Australia/New Zealand. The group offers services through two divisions: Professional Technical Services (PTS) and Management Support Services (MSS). AECOM Technology projects have included project management for the Saadiyat Island Cultural District in Abu Dhabi and master planning for the 2012 London Olympics.
The company's PTS segment, which accounted for some 86% of AECOM's 2011 revenues, provides planning, consulting, architectural, engineering, program management, and construction management services, while MSS offers facilities management as well as training and consulting services, primarily for the US government. Domestic and foreign governments together account for about two-thirds of the company's business, which could make it vulnerable to government spending cuts or political unrest. However, as the world's infrastructure needs grow, AECOM stands to benefit from the resulting increase in project opportunities.
Growth by acquisition is a large part of its strategy, as it enables the company to cement its leadership position in its existing markets. AECOM has acquired more than 35 companies in the last 10 years, expanding geographically and filling out its operations with like-minded companies, absorbing them into its existing units.
In 2010 AECOM continued its buying spree with a series of deals including the $245 million purchase of real estate company Tishman's construction business. It expanded its presence in Europe when it bought Spain-based INOCSA Ingenieria, a specialist in high-speed rail, energy, and water projects. AECOM also bought government national security intelligence services firm McNeil Technologies for $355 million and project management consultancy Davis Langdon for some $325 million. The acquisition of Montreal-based RSW boosted AECOM's global energy business.
AECOM acquired Spectral Services, a consulting firm based in India, in 2011. The addition helped deepen the company's presence across India and Asia and fell in line with AECOM's strategy to expand in emerging markets. Other deals that year included the purchase of four international consulting firms operating under the Davis Langdon name and Canadian engineering firm RSW. After a relatively quiet year with smaller acquisitions, the company is likely to go back into active buying mode. In early 2012, AECOM bought Chinese environmental specialist Capital Engineering Corporation, further expanding its presence in Asia.
Largely due to the acquisitions the company has made, AECOM's revenues have been growing year over year. Revenues grew 23% in 2011 to $8 billion, and profits rose 16% to $275.8 million. These gains were offset by a decrease in business for certain governments. For example, unrest in Libya caused AECOM to temporarily pull out of an infrastructure project in that country that year. Additionally, a contract with the US government to provide combat support services in the Middle East was completed in 2011. The company also exited certain operations in Western Europe as that region struggled. On the other hand, the company has secured numerous projects in Asia and Australia, where it is a leading design firm, so those areas have experienced growth. – less