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Dive brief:
- Turner Construction, the largest contractor by revenue in the US, has turned its attention overseas and acquired Ireland-based Dornan Engineering Group in a move to increase their dominance in high-tech constructions.
- New York City-based Turner said it acquired 100% of the speciality mechanical, electrical, instrumentation and commissioning engineering contractor expected to deliver approximately $760 million worth of work by 2024. Dornan has 1,000 direct employees with operations in Ireland, the UK and Europe, including the Nordic region
- The deal comes with Dornan’s roughly $1.2 billion backlog, which focuses on complex, large-scale projects in the advanced technology sector, including data centers and biopharma facilities. Turner has been an important player Advanced technology builds in the USA and said in the statement that it wants to expand this segment globally, starting with Europe.
Diving knowledge:
“Dornan brings an incredible strength to Turner and is an important part of Turner’s strategy to serve customers wherever their needs are,” Peter Davoren, Turner’s chairman and CEO, said in the press release. “The combination of Turner and Dornan will enable us to offer a wider range of services and solutions that our customers are looking for in Europe.”
The companies did not disclose the price of the deal, but it comes at a time when at least one major contractor, Australia-based Lendlease, has retired from doing business internationally and is now selling its business units abroad.
The movement also emerged as a The US construction market has continued to show strengthdespite a high interest rate environment, from government stimulus programs such as the $1.2 trillion Infrastructure Investment and Jobs Act, the $52 billion Science and CHIPS Act, and the $485 billion Inflation Reduction Act.
In contrast, European construction markets have generally struggled. In the UK, for example, the sector has had the most bankruptcies of any industry, with 4,287 by 2024. This equates to one in five construction companies are out of businessaccording to trade publication Roofing Today.
The construction industry in Germany, Europe’s largest economy and the world’s third largest behind only the United States and China, has also struggled mightily of late, with building permits drop by almost 40% from May 2022. Turner itself is owned by Germany-based Hochtief.
Even European-based companies that have been successful have pointed to the United States as the source of their biggest and best deals. Sweden-based Skanska, for example, highlighted the strength of its infrastructure projects in the US as the reason for its growing profits in the second quarter.
This is Turner’s second acquisition of an overseas company. It acquired 100% of UK-based project management company Real PM in 2019. It also has a majority stake in Canada-based Clark Builders and has a Turner office in Istanbul, Turkey.
A US sponsor
Amid this environment, a deep-pocketed sponsor in the United States would be a tempting suitor for many construction companies.
“Our employees and customers will benefit greatly as Dornan joins the Turner family of companies,” Dornan CEO Brian Acheson said in the statement. “They will also benefit from Dornan’s increased scale as part of a combined group with more than $18 billion in revenue. Likewise, our employees will find more opportunities offered by Turner to grow Dornan . I’m really excited and looking forward to our future together.”
In an email to Construction Dive, Turner spokesman Chris McFadden said “the combined scale and increased range of the companies’ services enhances Dornan and Turner’s ability to deliver work in Europe.”
McFadden said Turner, which has completed nearly $11 billion in volume in data centers, electric vehicle battery plants, semiconductor factories, industrial buildings and biopharma construction in the past two years in the U.S., has identified $20 billion dollars of advanced technology project opportunities in Europe.
“The growing use of artificial intelligence, the need for faster processing, increased remote working and learning, and other market demands will drive the growth of the semiconductor and data center market,” McFadden said. “The growth of sustainable mobility will drive continued investment in industrial manufacturing facilities. The biopharmaceutical market will continue to expand as customers explore new uses for existing products and develop new products that provide cures for rare and common diseases.” .
The deal, announced Wednesday, is subject to regulatory approval from the European Union.
