Flatiron, Dragados announce massive North American merger
The merged company, Flatiron Dragados, will be owned 61.8% by ACS Group and 38.2% by HOCHTIEF.
Flatiron and Dragdos recently collaborated on the Harbor bridge in Texas.
Key Takeaways:
- Flatiron and Dragados, owned by ACS Group and HOCHTIEF respectively, are merging to form one of the largest civil engineering and construction firms in North America.
- The merged company, Flatiron Dragados, will be owned 61.8% by ACS Group and 38.2% by HOCHTIEF.
- The integrated business has a backlog of USD 17.2 billion as of H1 2024, with revenue of USD 6.1 billion in 2023 and USD 3.1 billion in H1 2024. It operates in 24 U.S. states and eight Canadian provinces.
- The merger aims to create significant synergies and economies of scale, offering a strong platform for organic growth in North America.
The Whole Story:
Two North American construction giants are merging to create one of the largest civil engineering and construction firms on the continent.
Flatiron and Dragados have announced plans to merge operations in North America, powering the two companies’ joint growth potential in the market.
ACS Group and HOCHTIEF, the respective owners of Dragados and Flatiron, have agreed on key terms for the combination of the two companies, with ownership of the integrated company held 61.8% by ACS Group and 38.2% by HOCHTIEF. The company will be managed by Peter Davoren as chairman (in addition to his current role as chairman, CEO & resident of Turner) and the current CEO of Flatiron, Javier Sevilla, as CEO. The transaction closing is expected during the second half of 2024.
The integrated business has a backlog of USD $17.2 billion H1 2024, with revenue of USD 6.1 billion in 2023 and USD 3.1 billion in H1 2024. It has a long-standing presence in 24 states of the United States and eight Canadian provinces.
“Bringing together Flatiron and Dragados creates a strong platform for organic growth in North America,” said Juan Santamaría, CEO of HOCHTIEF. “They have the expertise, the long-term clients and are geographically complementary, providing significant synergies and economies of scale. We differentiate our commercial offering through our superior technical resources and skills.”
Santamaría added that Flatiron and Dragados North America employees have a long history of working together.
“The new company will have the most respected and recognized value proposition in its sectors, having delivered renowned projects across the United States and Canada, and can look forward to an even stronger future,” he said.
The company, named Flatiron Dragados, will continue to serve clients across its existing markets and support strong community and stakeholder relationships.
The company’s order backlog of USD 17.2 billion H1 2024 is weighted towards collaborative projects, with approximately 40% secured under this model.
Officials explained that the transformation into a new entity creates synergies and economies of scale. The simplified structure will ensure a consistent approach to operations, including tender processes, procurement strategies and risk management, and be value accretive for shareholders of ACS Group and HOCHTIEF.
The integrated company has a strong track record in civil engineering and construction (including roads and bridges, airports, railways, ports, dams and water treatment plants as well as tunneling projects).
Recently, through a joint venture, the companies have been working on the $1.2-billion Harbor Bridge project in Corpus Christi, Texas. It is currently slated for completion in 2025.
