AECOM Sells Power Unit to PE Firm, Shifts Design Group Leadership
AECOM said Oct. 5 it has combined its worldwide Design & Consulting Services (DCS) units, which includes those based in the Americas and the U.K., into “an integrated global organization” led by Lara Poloni, who was named corporate president in June. The change stems from the firm’s push “to simplify its operating structure,” it says.
Melbourne, Australia-based Poloni, the only woman on AECOM’s eight-member leadership team, is a 25-year firm veteran and had been CEO of its Europe, Middle East and Africa operations.
Steve Morriss, president of the DCS Americas group, has “stepped down effective immediately,” AECOM said, but in a federal filing, the firm said he remains a consultant on retainer for an unspecified period. It declined to comment on other DCS executive changes. The group has about 20,000 employees. Also, AECOM chief operating officer Randy Wotring has retired but remains a senior advisor through Dec. 31. The firm did not name a successor and a spokesman declined comment on whether the position will remain.
The changes are “required to further streamline AECOM’s cost structure and … hit longer term margin targets of 15%,” said Jamie Cook, lead industry analyst at Credit Suisse.
AECOM also said Oct. 16 that it has closed the sale of its power construction business to Critical Point Capital, a California private equity firm, with no financial terms disclosed. The transaction "marks another milestone in the successful execution of our transformation into a higher-margin, lower-risk professional services business,” said CEO Troy Rudd.
Critical Point Capital acquired the U.S. power and industrial engineering services division of Altran in 2018.
AECOM was named to lead a consortium on an $8 billion project to add two reactors at a Romanian nuclear power plant and refurbish an existing unit, the country's Economy Ministry said on Oct. 9, said a Reuters report. The team includes unnamed French, Canadian and Romanian partners.
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"Our view is the proceeds are minimal however more important, the transaction supports [AECOM's] strategic shift to a higher value added professional services firm. " said Cook of Credit Suisse.
Gregory A. Kelly will join design and CM firm STV as president and CEO, effective Oct. 26, the firm announced on Oct. 13. He will be based in New York City.
He had been CEO of Heritage Construction + Materials, an Indiana-based provider of asphalt products, aggregates and construction services in the Midwest.
Before this role, he was president and CEO of WSP USA, a key unit of Montreal-based design firm giant WSP Global.
He succeeds Milo Riverso, who left the firm on Sept. 30 “for personal and family reasons,” according to a previous company announcement.
