Aecom sells off civil construction practice to Oroco Capital
Aecom, a global engineering consultancy, has sold its civil construction business to Oroco Capital, a Bethesda, Maryland-based infrastructure investor and operator. Financial terms of the transaction, which is expected to close in January 2021, were not disclosed.
Aecom’s civil construction business does heavy civil, mass transit, mining, water, highway, and bridge work for public and private sector clients. It is the largest part of its construction operations. The sale includes Shimmick Construction, which was acquired in 2017 for $175 million.
The firm in October sold its power construction business to CriticalPoint Capital.
The two sales were driven by activist investor Starboard Capital, which has been pressuring the firm to exit higher-risk, fixed-price construction operations in favor of higher-margin, lower-risk professional services contracts.
"Today's announcement of the sale of our Civil construction business, together with the sale of our Power construction business in October, represents a significant milestone in advancing our strategy and focusing our efforts on our higher-margin and lower-risk Professional Services businesses," said Troy Rudd, who was named CEO of Aecom this summer.
The LA-headquartered company also announced it was adding three professional services sector veterans to its board, expanding the membership to 11. The appointments are another element of Aecom’s pivot to a professional services focus.
The new board members are Lydia Kennard, a program and construction management consultant and former executive director of Los Angeles World Airports; Diane Creel, former chairman and CEO of Ecovation, a wastewater management company; and Sander van’t Noordende, a former operating group CEO at Accenture.
Aecom recently reported a 2% decline in global revenue for fiscal year 2020, posting $13.2 billion.
Rival WSP was reportedly in talks to buy Aecom before the pandemic put a halt to the conversation. WSP instead has acquired Golder, a Canada-based international environmental consulting firm. The move will grow WSP’s environmental services business to a quarter of its overall revenue.
