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Across our operations, AECOM offers a unique blend of global reach, local knowledge, innovation, and technical excellence; and our operating companies are united by our shared vision, mission, and values.
Operating through more than a dozen subsidiaries, employee-owned AECOM Technology Corporation is a global provider of design, planning, engineering, consulting, program and construction management services, and operations and maintenance support. The Los Angeles-based private company is a leader in transportation and water and wastewater projects, and is also strong in such fields as design and construction; power generation and transmission projects; mine design, engineering, and infrastructure; and international development assistance, consulting with developing countries on such areas as public administration, municipal finance, political transition, and humanitarian response. Furthermore, subsidiary AECOM Enterprises, in conjunction with its equity partners, is involved in forging public-private partnership projects in the facilities, transportation, and environmental areas. AECOM maintains offices on five continents and employs some 24,000 people.
Heritage Dating to 1910
AECOM traces its origins to Kentucky-based Ashland Inc., which in turn grew out of Swiss Drilling Company, founded in Oklahoma in 1910 by J. Fred Miles. Unable to survive on the low prices offered for the Oklahoma crude Swiss Drilling produced, Miles relocated to the newly discovered oil fields of eastern Kentucky in 1915. He gained control of some 200,000 acres and formed Swiss Oil Company in Lexington. In 1924 Miles launched a refining operation called Ashland Refining Company, headed by an ambitious young man named Paul Blazer. While the parent company struggled, leading to the ouster of Miles, Ashland prospered under Blazer's leadership, and in 1936 he was named chief executive officer of the reorganized company, Ashland Oil & Refining Company.
Blazer added refineries as well as a chain of gas stations to sell gasoline and motor oil under the Ashland name. Before he retired in 1957, the company became increasingly involved in the chemical and petrochemical businesses. He was succeeded as CEO by his nephew Rex Blazer, who would take Ashland into areas beyond petroleum. In 1966 Ashland acquired Warren Brothers and became involved in the highway construction and construction materials business. The company was now able to take fuller advantage of refinery byproducts used to produce asphalt. Ashland grew into one of the nation's major road-construction firms and laid a future foundation for AECOM.
In the 1970s Ashland Oil & Refining became Ashland Oil, Inc. Five years later the company consolidated its construction assets into a construction division and also formed a coal subsidiary, indicative of a changing focus at Ashland. Although it generated more than $1 billion a year in sales, Ashland was a small player in the oil industry at a time when the cost of exploration had grown prohibitively expensive. By 1980 Ashland sold off its production assets, and a year later was reorganized as a modified holding company. A new corporate strategy was implemented as Ashland now focused on refining and marketing, and also looked to grow its non-refining businesses. In 1984 Ashland acquired Daniel, Mann, Johnson & Mendenall (DMJM), a global provider of transportation-related engineering services. Originally focused on military projects, after World War II it had become one of the first integrated engineering and architectural firms in the western United States. The acquisition of DMJM also included its president, Richard G. Newman, AECOM's future chief executive and chairman. In 1985 DMJM became part of a new subsidiary, Ashland Technology Corporation. Two years later Newman was named its new president.
Newman earned a B.S. in civil engineering from Bucknell University in 1956 and four years later earned a Master's in hydraulics and hydrology from Columbia University. In 1962 he went to work for Cahn Engineers, a small Connecticut firm that he helped to grow from a single office employing 16 to an eight-office operation employing more than 250. In 1971 Cahn was acquired by Genge, Inc., one of the first publicly traded architectural and engineering firms. Newman took over as president, and was later named CEO. By the time he left in 1977, Genge had become the third largest engineering firm in the country, according to Engineering News Record. Newman then joined DMJM, and under his leadership the firm tripled in size in six years.
Formation of AECOM: 1990
In 1989 Ashland decided to focus on its core petroleum refining business and elected to divest itself of some assets, one of which was an Ashland Technology subsidiary, Williams Brothers Engineering Co., involved in the construction of pipelines and oil processing facilities. In the meantime, Newman prepared a management-led employee buyback proposal to acquire what remained of Ashland Technology. According to the Los Angeles Business Journal, "His proposal was both simple and unique; employees would create value for their clients, which would create value for AECOM and in turn deliver value back to the employees through stock ownership." In April 1990 Ashland sold a 58 percent stake in Ashland Technology to the employee stock ownership plan. All told, Ashland received a $97 million package in cash, stock, and subordinated debt, including the proceeds from the Williams Brothers sale. Ashland Technology now took on the name AECOM Technology Corp. and established its headquarters in Los Angeles, where DMJM was based. (AECOM was an acronym for architects, engineers, construction, operation, and maintenance). Newman was named president, CEO, and chairman of the holding company. Included under the AECOM umbrella in addition to DMJM, and operating independently, were Consoer Townsend Envirodyne Engineers, a Chicago company with offices in the Midwest as well as New York and California; Frederic R. Harris, Inc., a New York firm founded in 1927, specializing in transportation projects; Homes & Narver, Inc., an Orange County, California-based firm founded in 1933 which also did a great deal of transportation work; Turner Collie & Braden, Inc. (TCB), a Houston engineering firm established after World War II by a pair of former U.S. Army Corps of Engineers, maintaining offices in Texas, Pennsylvania, Colorado, and New York. TCB was involved in both transportation and environmental contracts, as well as land development projects.
AECOM's decision to allow its subsidiaries to operate independently was not a common industry practice, but it proved to be a wise choice, as AECOM outperformed its rivals over the next several years. Moreover, by the mid-1990s AECOM began offering design and build services and operation and maintenance services while casting its net around the world. It was involved in such projects as the renovation of FBI headquarters in Washington, D.C.; contracts with Kuwait's Ministry of Interior; architectural design services for the Korean Development Bank and construction management services for the City of Seoul subway system; design services for the Philippines' Metro Manila Skyway; architectural, engineering, and program management services for Malaysian Airlines; design work for India's Port of Madras.
Revenues increased to nearly $725 million in fiscal 1997 (the year ending September 30) and net income totaled $2.8 million. In fiscal 1998 the firm was able to achieve 100 percent employee ownership, while revenues approached $860 million and net income more than doubled to $5.74 million. The firm was now ready to grow and diversify through strategic acquisitions. It also attempted to leverage the AECOM name while continuing to allow units to operate autonomously.
In March 1999 AECOM added Day & Zimmerman Infrastructure, Inc., an aviation project and construction management firm. Two weeks later AECOM acquired W. F. Castella, a San Antonio, Texas-based engineering and land surveying firm. Then, in May 1999, AECOM acquired Spillis Candela & Partners, a Coral Gables, Florida architectural and engineering firm. Altogether the three acquisitions cost AECOM $35.1 million in cash and stock.
The firm spent another $145 million in cash, stock, and notes on acquisitions in 2000. The first, completed in April of that year, was the purchase of Metcalf & Eddy, Inc., an environmental consultant founded in 1907 by Boston civil engineer Leonard Metcalf and the superintendent of the sewer department in Worcester, Massachusetts, Harrison Eddy. The firm became a pioneer in environmental engineering, especially in the treatment of industrial wastes, and went on to design the water treatment and wastewater plants in a number of North American cities. In the 1960s Metcalf & Eddy began to expand internationally and was eventually acquired by French water giant Vivendi. In August 1999 Vivendi acquired U.S. Filter Corp. in a $6.2 billion deal. Because of a potential conflict of interest, due to U.S. Filter selling water-related equipment and Metcalf & Eddy being in a position to recommend such equipment to its clients, Vivendi elected to sell Metcalf & Eddy, and AECOM was the beneficiary. Metcalf & Eddy had a great deal of brand recognition around the world in its area of expertise, and AECOM could now fold in its other environmental assets to maximize their value.
Also in April 2000, AECOM completed the acquisition of London, England-based Guy Maunsell International Limited, an infrastructure design firm and one of Europe's largest engineering and construction companies. It was founded in 1955 by an English marine engineer and was known for its bridge design work. Over the years Maunsell expanded overseas, first winning projects in Australia, and from there doing work in Hong Kong and throughout Asia, as well as Europe and the Middle East, all markets AECOM was targeting. With Maunsell in the fold, AECOM was able to add to the new unit the international offices of DMHM and Frederic R. Harris, while Maunsell was now able to do business in the United States, a market it was interested in. In addition, Maunsell provided Metcalf & Eddy with a way to reach new clients in a number of countries. Newman portrayed the Maunsell acquisition as a significant turning point for AECOM. "This merger positions us to compete effectively and grow across the globe," he told trade publication ENR. "We feel we are the preeminent infrastructure engineering firm in the world."
New Century Bringing Reorganization
AECOM's acquisitions led to a reorganization in the fall of 2000, as assets were redistributed along functional lines. A new infrastructure group, DMJM Harris, was formed out of units taken from DMJ, Holmes & Narver, and Frederick R. Harris. DMJM Facilities and Holmes & Narver were merged to create DMJM Holmes & Narver. In addition, AECOM enterprises was formed to serve as a program integrator to help sister units obtain project financing and provide other development services. As a result of the acquisition spree, AECOM's balance sheet grew flush. Revenues reached $995 million in 1999 and topped $1.4 billion a year later. Net profits, in the meantime, increased from $10.4 million to more than $18.1 million.
AECOM completed six acquisitions in 2001 at a cost of nearly $21 million. One of the three major additions was the transportation planning practice of KPMG Consulting LLC, a Fairfax, Virginia firm. The addition of the KPMG unit was part of a corporate strategy to take advantage of the state and federal governments' likely investments in the United States long-neglected transportation infrastructure. Next, AECOM bought the remaining two-thirds of Halpern Glick Maunsell, an Australian engineering firm in which AECOM had picked up a stake in the Maunsell acquisition. Finally, in April 2001, AECOM acquired Warren Group, an English water engineering firm.
Two more acquisitions followed in fiscal 2002. In October 2001, another United Kingdom engineering firm, Oscar Faber plc, was acquired and combined with Maunsell. Faber, which did about $75 million in business, was mostly involved in design and transportation planning. Later in the month AECOM bought Alliance, a Denver-based consulting firm. The two deals cost AECOM $44.4 million in cash, stock, and notes. Also in fiscal 2002, in March 2002, AECOM filed for an initial public offering of stock, which it hoped would raise as much as $473 million. The proceeds would be earmarked to buy back stock from shareholders, pay down debt, and make more acquisitions. The market was not receptive to new offerings, however, and the sale was postponed indefinitely.
Despite being denied a chance to build up a war chest to fund further acquisitions, AECOM continued to pursue an expansion strategy. In April 2004, it added PADCO Inc., a Washington, D.C., consultant that mostly worked on World Bank and USAID economic development studies. In December 2005, AECOM spent $2.5 million on the Schaumberg, Illinois, and Houston offices of The Austin Co., a Cleveland, Ohio-based design and construction firm that recently filed for bankruptcy. These offices were combined with AECOM's subsidiary McClier Corp., and began doing business under the name of Austin AECOM. AECOM later attempted to purchase the rest of Austin but was outbid by Kajima Corp., a Japanese general contractor. AECOM was more successful in September 2005, when it acquired ENSR International, a Massachusetts-based environmental consulting, engineering, and remediation firm serving energy, oil and gas, chemical, and aerospace industrial clients. Three months later, AECOM added EDAW Inc., a San Francisco urban planning and design, landscape architecture, economics, and cultural and environmental services firm doing business around the world.
AECOM was now a $2.4 billion company and still growing. Newman, now 70 years of age, turned over the CEO post to 57-year-old John D. Dionisio, his chief operating officer. Newman stayed on as chairman, however. In a press release, Dionisio maintained, "AECOM has an impressive record of global growth and I intend to build upon that legacy."
AGS; Austin AECOM; DMJM Aviation; DMJM H&N; DMJM Harris; EDAW; ENSR; Faber Maunsell; Metcalf & Eddy; PADCO.
ABB Ltd.; Bechtel Group, Inc.; The Louis Berger Group.