Midwest Contractors Invest in Data Center Expertise, Merge to Grow
Respondents to ENR Midwest’s Top Contractors survey reported $38.8 billion in 2018 revenue across the 11-state region, an increase from the $37.7 billion that a slightly larger group of contractors reported last year. The market for construction services continues to grow despite nearly full employment across the sector.
The region’s largest firms are fueling growth by acquiring other businesses, focusing resources on hot markets and investing in new technologies.
Turner Construction sits atop the ranking this year, up a spot from last year, with $2.77 billion in regional revenue. Nearly half of that (48%) came from the telecommunications market, and most of that from data centers.
“We have active data center projects in Missouri, Illinois, Iowa, Nebraska, Ohio and Michigan at this point, and we have offices in all those markets to support this work,” says Ben Kaplan, senior vice president of global critical facilities at Turner.
With digital infrastructure becoming critically important to the functioning of business and government, Turner’s investment in and pursuit of data center work has increased every year this decade.
“Generally speaking, the market shifted from what might have been a short-term growth pattern in data centers to the development of a full blown digital infrastructure that supports not just the data center market,” he says.
While Turner’s investment in technology and critical infrastructure pushed the firm to the top of this year’s ranking, No. 2-ranked Clayco, which was ranked No. 1 in 2018, was not far back with $2.68 billion in regional revenue. Clayco’s continued success stems from its expertise as a design-builder, and the firm leads the region’s design-build contractors breakout ranking with $2.54 billion in design-build revenue.
Clayco recently announced that it is combining two design firms acquisitions. Bates Forum is losing its name in a combination with the Lamar Johnson Collaborative, and the new firm will work in Clayco’s Chicago office.
“We think there’s a giant segment of the clients that are moving to design-build,” says Clayco CEO Bob Clark. “We don’t think it, we know it. It’s the most rapidly growing delivery method in the market from the whole country.”
Cincinnati’s Messer Construction Co.—ranked no. 13 with $882.25 million in revenue—recently acquired industrial contractor EGC Construction, which specializes in design-build, industrial manufacturing and equipment installation. Messer is known as a regional leader in eastern Ohio and western Indiana and Kentucky, with particular expertise in health care and education. This was the first acquisition for Messer.
“Industrial and manufacturing is a market that is going to continue to grow in our region, and there is more and more flow of projects going into it, so we are trying to build our capability [through the acquisition],” says Tom Keckeis, chairman of the board at Messer. He says using BIM technology, delivering integrated projects and manufacturing building systems off site were what sparked Messer’s interest in EGC.”
“We felt like it was the right fit on the kinds of things that they do versus the kinds of things we do in manufacturing and industrial, and so that’s why the synergy made sense for us,” he says. “There is a lot of opportunity to continue growing the manufacturing side that will complement the construction side.”