Joseph Albanese, left, and Paul Martini have joined forces at Commodore Builders in Newton.
Thomas Grillo
Real Estate Editor- Boston Business Journal
Two Greater Boston construction companies are the latest to merge, a sign that more industry consolidation is coming, according to company executives.
“The impact of the economic recession will lead to more mergers,” said John Fish, CEO of Boston-based Suffolk Construction. “The economic tumult has forced construction companies to be well-capitalized, and since 2008, companies’ balance sheets have been compromised. To survive, everyone has to examine alternate ways of conducting business, and that’s where mergers and acquisitions come in.”
The deal between Newton-based Commodore Builders and A.J. Martini in Winchester was necessary says Joseph Albanese, Commodore’s CEO, because the pie is getting smaller and competition has been fierce, driving pricing and margins down.
“It used to be that when risks got higher, rewards got higher,” Albanese said. “But today construction has never been riskier and rewards have never been lower.”
Merging the firms puts Commodore in the middle of the pack among the region’s construction companies in terms of size. Suffolk Construction, Gilbane Building Co., Consigli Construction Co., Shawmut Design Construction and Walsh Bros. are the area’s top producing general contractors with more than $2 billion in total dollar volume in the Bay State last year, according to Boston Business Journal researchers.
For more read “Building pressure for mergers in construction” (premium content).
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