Consolidation of heritage compliance firms in the United States continues as more and more owner/operators seek retirement and firms struggle to gain market share. Today, the largest heritage-only firms only hold approximately 1-1.5 percent of market share of the compliance sector, now at $928 million annually and forecast to grow to $1.25 billion by 2020. Yesterday, Heritage Business Journal (HBJ) received this press release from ASM Affiliates and Rechtman Consulting announcing a new merger. Company news can be submitted to HBJ from the “Submit Press Release” page.
HILO, HAWAII – DECEMBER 3, 2013 – Rechtman Consulting has been acquired by ASM Affiliates (ASM). Going forward the company will operate as ASM Hawaii. Bob Rechtman will be leading ASM Hawaii as Managing Director for its Hawaii and Pacific operations. The transaction involved the assets of Rechtman Consulting including its existing contracts and proposals. All the current employees have joined ASM Hawaii. Henberger served as the exclusive advisor to ASM. Financial terms were not disclosed.
“Rechtman Consulting’s reputation, its book of business and Bob Rechtman’s desire to join a larger entity, thereby allowing him to focus on his work and his clients, attracted us to this opportunity,” says ASM’s COO Bill Graham, who spearheaded the initiative. “To better serve our existing clients we had been looking for a while to expand our geographic footprint to Hawaii and the Pacific. The addition of Bob Rechtman and his team will allow us to accelerate our ability to meet the needs of our clients,” added John Cook, CEO of ASM.
“I am excited about the opportunities this acquisition provides to me and my employees,” says Bob Rechtman, Managing Director ASM Hawaii. “The cultural resource management industry today requires marketing and financial resources that, as a small operator, Rechtman Consulting was no longer able to afford on its own. I believe that ASM’s values and mine are closely aligned. Together we will be able to better serve our existing clients and expand into new markets that we were previously not able to enter.”
Charles Mount has been following construction activity as a proxy variable for commercial archaeology work in Ireland (Mount 2012). His data show that a slowdown in construction results in a reduction in commercial archaeology, a well known trend around the world. Applying this concept to the UK we can look at the construction industry as a proxy for possible commercial archaeology activitiy. In this case, the The Markit/CIPS Purchasing Managers’ Index (PMI) is used. The results show that while construction was very strong at the beginning of the year, especially March, the index has been falling in the last couple of months. It is currently flirting with contraction, a reading of under 50, and it is unlikely that commercial archaeology, as a whole sector, will have seen lots of growth in the last few months.
Taking a longer view of the sector shows some clouds on the horizon. The UK government is now providing pipeline views of new construction projects anticipated over the next couple of years. These are big projects, £10 million plus, but these projects indicate a drop in government construction projects over the next few years. Government construction projects make up 40 percent of the construction sector.
|Count of Entries||Sum of 2011/12 (£m)||Sum of 2012/13 (£m)||Sum of 2013/14 (£m)||Sum of 2014/15 (£m)|
|Flood||38||£224 m||£289 m||£273 m||£251 m|
|Health||158||£590 m||£1,066 m||£983 m||£807 m|
|Housing & Regeneration||47||£1,789 m||£1,100 m||£1,281 m||£1,552 m|
|Justice||14||£203 m||£254 m||£280 m||£78 m|
|Transport||68||£3,596 m||£3,411 m||£3,622 m||£4,001 m|
|Waste||35||£594 m||£1,090 m||£1,407 m||£803 m|
|Education||£2,504 m||£1,640 m||£486 m|
|MOD||90||£396 m||£732 m||£627 m||£592 m|
|Police Authorities||132||£216 m||£14 m||£15 m||£03 m|
|Home Office||6||£13 m|
|Nuclear Decommissioning||24||£313 m||£275 m||£360 m||£449 m|
|Research||10||£13 m||£23 m||£14 m||£11 m|
|Further Education||1||£17 m||£153 m||£59 m||£01 m|
|Culture, Media and Sport||4||£1,098 m||£467 m||£425 m||£117 m|
|FCO Embassies||£42 m||£64 m||£69 m||£65 m|
|Coal Authority||2||£06 m||£07 m||£08 m||£08 m|
|Grand Total||629||£11,614 m||£10,586 m||£9,908 m||£8,738 m|
This could pickup as more projects are proposed and more money is allotted to large government construction projects. However, there needs to be a 25 percent increase in money allotted for proposed projects by 2014/15 to keep the supply constant. It looks as though construction will not see large growth in the next few months and there are head winds for the future. This means that commercial archaeology is probably in a similar setting. Do not expect a large contraction, but there is unlikely to be a large pickup either.
As should always be noted, a large catastrophic event make all projects redundant.
Mount, C. 2012. Indicators suggest that archaeological activity in Ireland continued to decline in the third quarter of 2012. The Charles Mount Blog, 4 October 2012. http://charles-mount.ie/wp/?p=960
The annual conference of the American Cultural Resources Association (ACRA) was held a few days ago in Seattle, Washington. ACRA is the trade association for the heritage compliance sector in the United States. While the ACRA program is filled with valuable business topics, the real benefit of attending is gained from talking with company owners and senior employees in the hallways and at the many social events. People often say things about their businesses that they probably shouldn’t and one always comes away from the meeting with a wealth of information about competitors and the compliance sector as a whole.
My back hallway sample, probably representative although not statistical, indicated that the compliance sector in the United States is strong. Most companies reported that 2012 has been a good year for business, with more than a few companies reporting that this year will be their strongest year since the recession of 2008/2009–some reporting their best year ever. Strength is primarily coming from activity in the mining, electrical transmission, alternative energy, and oil/gas client sectors. This pattern of strong performance appears to be geographically uniform, although there are some areas of the country doing better than others due to geographical factors (e.g. locations of oil fields and mineral resources). There are, however, a few gaps in the compliance sector’s overall strong business performance. A few firms reported that they are still having difficult times and have yet to really rebound from the recession four years ago. What is interesting about this is that a few of these firms are well known firms that have been market-share leaders in the past.