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Tuesday, July 27, 2010

Aecom Buys Tishman Construction - WSJ.com BIM Boom!

Now here's something you don't see every day. An architecture firm buying a construction company. No matter which way you look at it, we're all going Design-BIM-Build. This will definitely change the AEC industry. I love these early adopters and trend setters.

Kudos to two other blogs for picking this one up first.
Reference: http://frombulator.com/2010/07/design-build-boom-aecom-acquires-tishman-bim/
& http://bimcompletethought.blogspot.com/2010/07/aecom-acquires-tishman.html


[TISHMAN] Getty Images

Tishman Construction's signature projects outside of New York include MGM Mirage's elaborate new CityCenter in Las Vegas, shown above.

Aecom Technology Corp. has acquired Tishman Construction Corp. for $245 million, in a deal that combines one of the world's largest engineering and design firms with the storied New York-based construction business.

The companies have overseen some of the world's largest complex construction projects. Los Angeles-based Aecom is currently working on New York City's new Second Avenue subway and Saadiyat Island, a $30 billion development off the coast of Abu Dhabi.

Tishman's signature construction projects include the original World Trade Center; MGM Mirage's CityCenter in Las Vegas; and the new Goldman Sachs Group Inc. headquarters in Lower Manhattan. It's also handling the construction of One World Trade Center, which at 1,776 feet is expected to become the tallest building in the U.S.

The U.S. construction industry continues to struggle and some U.S. firms look abroad for new sources of business. Both Aecon and Tishman have weathered the downturn, benefiting from increased government spending on infrastructure world-wide, even as private-sector construction has sputtered.

Economists expect spending on U.S. nonresidential construction to drop 20% in 2010 compared with last year, according to a survey released Wednesday by the American Institute of Architects.

"For the most part, construction still seems to be dead in the water," said Ken Simonson, chief economist for the Associated General Contractors of America.

Tishman, Aecom Projects

See some of the firms' major buildings and construction projects.

Bloomberg News

A publicly traded company with $6 billion in annual revenues and 45,000 employees, Aecom derives roughly three-quarters of its business from government contracts. Tishman, a closely held firm with about $1 billion in revenue, generates about 40% of its business from public-sector work. Last year Tishman opened an office in Abu Dhabi, where it is developing several projects including an Angsana Resort and Spa.

The acquisition of Tishman expands Aecom's construction-management unit, which is among the higher-margin businesses in the company's stable. Aecom, originally a unit of chemicals company Ashland Inc., has grown largely through acquisition, acquiring 36 businesses around the world — from architecture firms to engineering outfits to environmental companies—over the past five years. The company is paying for Tishman with a combination of cash and stock.

Tishman was founded in New York in 1898 by the great-grandfather of the company's current chairman and chief executive, Daniel Tishman. Though connected decades ago, the company has no business relationship with Tishman Speyer Properties, the prominent landlord that has run into financial woes with some of its top-of-the-market real-estate deals.

Another related company, Tishman Hotel & Realty LP, whose stable of properties includes the new Intercontinental New York Times Square, is also not part of the transaction.

Mr. Tishman, 55 years old, will become a vice chairman of Aecom and a member of its board.

"When we first started talking I said 'Dan, are you going fishing?' and he said 'No I'm not,"' said John Dionisio, Aecom's CEO. "If he was leaving, this deal wasn't happening."

In 4 p.m. New York Stock Exchange composite trading, Aecom shares stood at $24.17, down 17 cents, giving the company a $2.77 billion market capitalization.

Original Source: Aecom Buys Tishman Construction - WSJ.com


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