Five Takeaways on 2015 A/E M&A Activity

Fueled by cheap debt, a restless and activist investor climate, and a desire to accelerate growth through economies of scale and efficiencies, global mergers and acquisitions (M&A) across all industries hit an all-time high in 2015. In fact, this year will break the dollar volume M&A record achieved back in 2007. Every few days saw one massive transformational combination announced after another: Dow Chemical/DuPont, Pfizer/Allergan, Dell/EMC, AB InBev/SABMiller, Kraft-Heinz, Walgreens/Rite Aid, Anthem/Cigna, and Intel/Alera to name a few.

The A/E industry is concluding a solid year in terms of the number of deals as well as intriguing partnerships that came together. And although 2015 lacked true mega combinations, that can be chalked up to global participants still digesting and integrating sizable targets during the last 24 months as well as a number of prominent A/E organizations undertaking high-profile restructurings and leadership successions. Still, deals such as WSP’s $425 million purchase of MMM Group, Intertek’s $330 million acquisition of PSI, and Tetra Tech’s $96 million purchase of Coffey International indicate that cross-border M&A is indeed active and strategic buyers are on the hunt for blue-chip consultancies in the United States and beyond.

By our analysis, the total number of North American A/E deals will be up a few percentage points over 2014 levels. Despite the persistent unevenness of the industry recovery and entering 2016 with a few large unknowns (e.g., interest rates, elections, energy prices, tight A/E labor market, etc.), CEOs continue to feel relatively confident on the near-term outlook. As a result, many are looking to make calculated deals to enhance market sector, service capabilities or expand their reach into new geographies.

Notable A/E M&A takeaways include the following:

  1. 2015 was the year of the small deal. The median size for an A/E seller in 2015 was 18 employees, which equates to a firm generating net revenue between $2 – $3 million– the smallest level during the last six years. The vast number of transactions in 2015 were undertaken by mid-size firms (50-500 employees) and, in some cases new or infrequent buyers, who absorbed “tuck-in” and easily digestible targets. It also indicates that multi-discipline or multi-studio buyers were seeking highly specialized or localized targets, which by their nature tend to be niche/smaller.
  2. Increase in certified and set-aside firms adding to deal complications. One of the ramifications of the recession was an increase in the number of A/E firms that started (or changed their ownership profiles) to explicitly participate in a range of federal and state certified programs (e.g., WBE, MBE, DBE, SDB, HUB, Veteran-Owned, 8(a), etc.). In addition, 2012 saw the federal government dramatically amend its definition of “small business” for A/E firms by ramping up the amount of revenue a firm can generate and still be considered a small business. Although this change offered firms new opportunities to pursue federal small business set-aside contracts as well as team on large federal contracts that have small business requirements, it also complicates M&A pursuits for buyers and sellers.
    Buyers seeking smaller non-certified targets focusing on federal and state infrastructure, building, environmental or transportation projects, particularly those in heavily regulated states, are increasingly finding limited options available. Buyers are naturally skeptical of certified firms’ (even targets with only small amounts of revenue generated by these programs) ability to assign contracts over and then win future work without the benefit of set-aside programs and vehicles. And firms who rushed into these certifications and classifications for near-term economic benefits, but who may want to sell down the road, will likely face longer-term exit strategy challenges, potential valuation haircuts, and limits on staff size and revenue growth.
  3. It was an active year for private equity investors. Private equity teams have had a limited, but steadily growing, appetite for investing in large and mid-size A/E and environmental-consulting firms. However, 2015 was perhaps the most active year for these financial buyers in recent memory, highlighted by Apollo Global Management’s $300 million preferred equity stake in CH2M as well as Crescent Capital’s 41 percent unsolicited takeover position in Cardno. Numerous other financial sponsors came into the mix to recapitalize or make new investments in prominent A/E and environmental firms, including Jensen Hughes, EN Engineering, Trinity Consultants, ERM, ENTACT, Vidaris, MorrisSwitzer, and Cardno ATC. We expect all of these A/E platforms to actively in seek “add-on” deals in 2016 and beyond.
  4. The need for skillful integration remains critical. Although agreeing to terms and negotiating the closing documents is certainly a crucial part of the M&A process, the integration of people and capabilities to truly become one organization is the “secret sauce” in professional service transactions. With more than 1,000 A/E deals completed during the last five years, obviously not all work out as planned.
    Each year we hear the rumors and see the fall-out of deals that failed to live up to expectations despite a favorable design and operating environment. These setbacks can emanate from poor operational execution, key staff departing, unfulfilled synergies, leaders uncomfortable in new roles, bad timing/luck and even questionable buyer strategic intent from the beginning. As such, with millions at stake, we’re seeing renewed emphasis on thoughtful and deliberate multi-year integration and communication activities for risk minimization and enhancing overall shareholder value.
  5. Sellers need to be mindful of their options. As we showcased in our November perspective, today’s sellers need to be increasingly aware of their organization’s marketability, valuation potential and synergistic prospects. We’ve seen a number of otherwise exemplary A/E firms engage with a buyer or test the broader market only to find tepid interest, underwhelming offers, or disparate cultures and business practices in joining forces. For owners who have “hung their hats” on an external sale route, we’re encouraging them to take a more reflective look at other internal transition options or deferred compensation arrangements for unlocking value and overall firm sustainability.

At Rusk O’Brien Gido + Partners, we possess strong relationships and years of experience navigating A/E and environmental buyers and sellers through the M&A process and towards winning combinations. Whether you are seeking to grow through acquisitions or by evaluating your firm’s strategic and ownership alternatives, please contact us as to how we can help your organization.

On a final note, Season’s Greetings and a happy, healthy and prosperous New Year from all of us here at ROG + Partners!


Which Path To Choose – The Internal or External Sale?

2015 marks the year that individuals born in the 1950s will turn somewhere between 56 and 65, typically prime years for ownership transition and monetization of equity stakes heading into retirement. But for A/E owners who have survived the recession and are back on track financially, many remain conflicted as to which is the best course for them to effectively exit their organizations. As we have witnessed over the past few years, the “sell down” internal transition or “sell out” external option are not always mutually exclusive.

Let me offer two anecdotes to illustrate my point:

  1. Our team undertakes many internal transition engagements each year where our role is to conduct a valuation and then consult with the buyers and sellers to create an orderly process to move blocks of shares over time. In many instances, the older shareholders – those with large stock positions – have groomed a new generation of employees on the benefits of becoming an owner, and are confident that “passing the torch” will be relatively effortless.
    However, even with the best of intentions, those internal transfer discussions can break down. Young employees don’t have the financial resources or are simply risk averse to the concept; valuation differences between the parties create tension and resentment; or senior leaders (oftentimes first generation owners) have second thoughts on their staff’s ability to successfully run the firm. Long, simmering partner grudges as well as elements of greed and ego enter into the mix. The process never gains traction and frustrations lead to fragility. Senior leaders surmise that perhaps selling out to a larger A/E firm will be easier and begin to chart a new path.
  1. Alternatively, we have M&A assignments where controlling shareholders conclude that selling the firm is in the best interest for everyone involved. Every year, they encounter larger and more formidable competitors, a consolidating industry, new client demands, and increasing business costs and pressures.
    In some cases, once a letter of intent was negotiated and signed with a buyer, the owners began to share the news with their key employees and younger leaders only to find a surprising response – “Please don’t sell!” Minority shareholders or key non-owners, who are influential in the long-run direction of business development and integration, were vocal opponents to the sale. Senior leaders just assumed the interest was never there internally. That revelation can create awkward tensions between the buyer and seller, but also serve to initiate a “fresh start” dialogue on keeping the firm independent through an internal buyout.

In our discussions with owners of every firm size and discipline, the names are different but the dilemmas and options remain the same. We hear, “We’d like to sell internally but just aren’t sure we have the right entrepreneurial people to make it work.” Another common lament is, “Selling to an outside buyer sounds appealing, but I’m concerned about the changes it would bring to our culture and operations.” Trust us – these are truly existential decisions many A/E owners face today as they evaluate their firm’s sustainability and survivability. In addition, the plain reality is that individuals’ ownership stakes constitute a sizable portion of their portfolios and retirement savings and thus, are naturally anxious about unlocking that value.

So to help with the decision making process, we thought we would offer our own sentiments and pros and cons on assessing the two main transition alternatives.

The Internal Option

For all the promotion and headlines on industry M&A activity, the reality is that the vast number of A/E firms pursue the internal transition path. Principals and partners perpetuate the organization by putting procedures in place to transfer shares to other individuals they have selected and developed. These programs can take the form of direct buy-sell arrangements, using the company or deferred compensation as a conduit, or implementing an Employee Stock Ownership Plan (ESOP) or a similar participatory arrangement.

Assuming there are willing buyers, the nice part about the internal transition is that employee-managers retain operational control and can dictate their own destiny and strategic vision. For traditional internal programs, ownership can remain exclusive to certain individuals and serve as a motivational aspect to drive performance. In addition, many younger buyers are pleasantly surprised with the strong return on investment these opportunities can afford. With ESOPs, there are often significant tax savings that come along with implementation and they also serve as a new company benefit that all employees can participate in. ESOPs typically offer higher valuations than traditional buy-sell models, primarily due to their enhanced liquidity feature.

The main drawbacks to the traditional internal transition are that it typically affords the lowest valuation (compared to other options) and often has the longest payout period. Depending on the number of sellers, it is not uncommon to see payouts take place over 5-10 (or more!) years. Future cash flow required for retiring shareholder debt can squeeze out other firm priorities such as new software and equipment, incentive compensation, and working capital needs.

ESOPs have their own funding, administrative, and annual appraisal costs to implement and maintain. In addition, ESOPs can also dilute the value to other current shareholders. In some extreme cases, leaders have removed their ESOP as they discovered it was never properly communicated as an advantage or employees simply don’t value the benefit. For ESOPs in particular, success really does depend on the specific culture of one’s organization.

The External (M&A) Option

Assuming the firm has marketable characteristics, the lure of selling to an outside buyer typically brings the highest valuation and fastest liquidity. While no two A/E deals are alike, it’s customary to have some portion of the consideration in cash at closing with perhaps 2-5 years in an installment note for the balance. A compressed horizon as well as taking future payments from a larger, well-financed buyer often reduces that risk element to owners. Larger firms can sometimes bring additional financial, marketing, and recruiting resources, new career options and opportunities to a seller’s staff, and ancillary disciplines to clients for “one-stop shopping” purposes.

The biggest drawback in selling is giving up operational control and independence to a new entity. Many A/E owners who started their practices after working in larger firms don’t always relish the prospect of rejoining companies with different cultures, organizational layers, rules and controls, and more formal business practices. As we see every year, A/E M&A deals are delicate and fraught with integration risk. Roles change, benefits and processes are different, and there is the real worry that key staff and clients will leave over time. Managing expectations and minimizing surprises for both parties is a critical component of successful deal making.


Given aging demographics and an evolving competitive landscape, we believe there will be increasingly more net sellers of stock than buyers, with wide ramifications on future valuations and marketability. Having realistic transition options and long-term planning is critical. Do these situations sound familiar? Let us know. ROG + Partners brings years of seasoned financial and business experience in navigating A/E and environmental clients of all backgrounds through strategic and ownership alternatives.


A/E Business Valuation and M&A Transaction Study — Third Edition

The A/E Business Valuation and M&A Transaction Study – Third Edition Survey is now open for participation and purchase!

To learn more and to order your copy, click here.

The Optimal Allocation of Your Firm’s Return on Investment

If we were asked to identify the most recent, sweeping trend of ownership planning, it would be the restart of ownership plans that were put on hold due to the last recession. The recession caused many firms to suspend their transition plans because their stock values had fallen so dramatically. The common owners’ lament was “the amount of money I needed or expected for retirement was no longer there.”

This is one of the greatest conundrums of being a major employee-shareholder in a privately held firm. The largest risk to your retirement planning is likely to be a lack of portfolio diversification. Your compensation, benefits, and a significant portion of your retirement assets are likely tied-up in one asset – your firm. Over the past five years in particular, I have learned from helping A/E firms with their ownership transition plans just how much of many companies’ total return on investment is driven by capital appreciation, rather than income. It may be time to rethink this strategy.

As a rule, investors require a return that adequately reflects the risk of that investment. Understanding where you can generate your returns is essential to understanding how you can mitigate your retirement risk. Shareholder returns come in one of two forms: capital (stock) appreciation and dividends (income). The composite of these components is known as “total return on investment,” and is used by investors to decide how and where to allocate investment capital. The required rate of return is a function of the risk of that investment and the relationship between the two is generally thought of as having a high, positive correlation. The greater the risk of an investment, the greater the return required.

Long-term returns are tied directly to the capital appreciation of the underlying asset (stock in your company). For example, if you purchased shares at a price of $10 per share, then ten years later, sold them for $40 per share, your compounded return on investment would be approximately 15%. Short-term returns are often tied to the annual income that the underlying asset produces and pays out to investors. This income is generally identified as:

  1. Distributed profits allocated based on ownership interest – common with S-corporations and limited liability companies
  2. Dividends distributed – common with C-corporations
  3. “Owners’ Bonus” – compensation – most common with C-corporations

If you were given three alternatives for an investment and could only pick one, which alternative would you choose?

Alternative 1: Annual stock price appreciation is projected to be 20% per annum, profit distributed equals 2% of the previous year’s stock price (i.e. dividend yield), and total cash to be received over the life of the investment is projected to be $57.11 per share (including the sale of your share in the future), thus yielding a total return of 22%.


Alternative 2: Annual stock price appreciation is projected to be 2% per annum, the dividend yield is 15%, and total cash to be received over the life of the investment is projected to be $18.61 per share, thus yielding a total return of 17%.


Alternative 3: Annual stock price appreciation is projected to be 8% per annum, the dividend yield is 12%, and total cash to be received over the life of the investment is projected to be $28.67 per share, thus yielding a total return of 20%.


All three investments look attractive. Alternative 1 looks very attractive because it has the highest return and since the capital gains tax rate is much lower than income tax rates, the after-tax value is even more favorable. Ninety-one percent of the return is tied to stock appreciation. Alternative 2 is appealing because the majority of the return is tied to income, but it provides for the lowest return on investment. You receive your return annually, which provides greater liquidity for your shares because investors can rely on annual cash flows to help fund the purchase of the shares. Eighty-eight percent of the total return is derived from income rather than stock appreciation. Finally, Alternative 3 might be appealing because while there is meaningful stock appreciation, there is also solid annual income being generated. The return is lower than Alternative 1, but only 40% of the total return is tied to stock appreciation. The last alternative is meaningful because in the event that your investment is worthless by the time you retire, not all is lost. All things being equal, you will have generated a return of 12%. This may not meet your return requirement, but it does limit your downside risk.

The illiquidity of the underlying shares poses one of the greatest investment risks of ownership in your closely-held company. The typical discount applied to closely held companies for lack of marketability ranges from 13% to 40%. The larger the portion of the return that is tied to capital appreciation, the greater the discount. Because there is no public market for your shares, the inherent risk of such an illiquid investment is much higher than the risk of an investment that can be disposed of at any time. Generally, closely-held companies have to create a market for their shares by ensuring annual income that is tied directly or indirectly to ownership in the company.

Where your returns come from will vary from time to time. As your firm seeks growth opportunities, current returns are likely to decline in order to fund growth. However, being mindful of where your returns are derived will force you to seek growth strategies that mitigate profit dilution.

In analyzing year-end S&P data, we found that over the past five years, dividends comprised an average of 14% of the total return of the index. For the past twenty years it was not much higher, averaging 18%. Thinking about this in a different context, we can infer that investors do NOT look to dividends so much as they do to capital appreciation for meeting their return requirements. This is primarily due to the inherent liquidity of the shares of public traded companies because when the future outlook for a given company turns negative the investor can dispose their shares immediately. However, in a closely held A/E firm, the opposite is true.

The table below summarizes some of the publicly traded A/E firms that we analyzed. Of the twelve companies, five did not pay any dividends. Ecology and Environment Group provides some very interesting results, because it is the only firm that is thinly traded. If anything, this firm could closely reflect similar liquidity risks to closely-held companies. Over the last five years all of its returns have been from its quarterly dividends.


Unlike the returns of a publicly-traded stock, A/E shareholder returns are generally comprised of a higher ratio of dividends-to-capital-appreciation than what is seen in the capital markets. Why? Primarily because of the restrictive nature of share transactions in A/E firms. In most firms, shareholders agreements allow for redemption of stock only upon retirement, termination of employment and events such as the death or disability of a shareholder. Further, even once you’ve successfully sold your shares, you may still be at risk of not receiving full payment if the company’s performance deteriorates. After the recession, we witnessed numerous companies having to go back to former shareholders to renegotiate recent stock repurchase deals due to the company’s inability to make the associated note payments.

A couple of final thoughts:  The primary assets of an A/E firm are its employees. Investment in these “assets” is critical for your company to remain a viable going-concern. Therefore, shouldn’t there be regular distributions or “compensation” paid to those who are driving the success of the firm? If you also consider that smaller A/E firms are more often subject to key person(s) risks than larger firms, you can draw the reasonable conclusion that the goodwill value of such firms is more personal in nature and more likely to be impaired upon the retirement or termination of a key person. Given the risk of impairment of the goodwill value in such a firm, shouldn’t the total return on investment be less dependent on stock value appreciation?  These are yet more arguments for structuring a larger portion of a firm’s return on investment in the form of income to shareholders.

Rusk O’Brien Gido + Partners will be hosting their Annual Growth & Ownership Strategies Conference in Naples, Florida on November 4-6. Join us and well over 100 other A/E firm leaders to learn more about strategies for achieving growth and improving profitability.

Click here to learn more and register.


The Engineering Industry Equity Drain: Crisis or Opportunity?

While Wall Street wrings its hands over how the markets will be impacted by the baby boomers cashing in their 401(k)s and pensions as they leave the workforce, a generation of engineers is similarly worried about what will happen to their companies as aging owners look to retire and cashout. Some will see it as an insurmountable challenge, others (hopefully) will see it as a once in-a-lifetime opportunity.

Demographic Trends

To better understand the situation, it’s important to have some perspective on demographic trends in the United States, as well as the size and characteristics of the engineering industry. The United States. experienced a spike in birth rates immediately following World War II, commonly referred to as the baby boom. Men and women of that generation — born between 1946 and 1964— now are leaving the workforce at a rate of approximately 10,000 individuals per day.

Following the baby boom was a trough or dip in the U.S. birth rate that continued through the 1970s. This smaller “Generation X” is represented by men and women ages 36 to 50 — and is one of the reasons why skilled project managers with 15-plus years of experience are so difficult to find. Behind that trough is another increase in the U.S. birth rate that continued through the turn of the century; these are the Echo Boomers ( i.e., Millennials or Gen Y) — ages 35 and younger.

Engineering Equity

According to the latest available data from the U.S. Census Bureau, there are approximately 60,000 businesses in the engineering industry as defined by North American Industry Classification System code 54133. These businesses employ approximately 1 million professionals , and generate gross revenue of more than $200 billion.

From this aggregate industry data, some interesting estimates of the magnitude of the engineering industry equity drain can be extrapolated. To estimate the value of the business enterprises, valuation data from the most recent “A/E Business Valuation and M&A Transactions Study” was used, which indicates that the median engineering firm’s value as a percentage of gross revenue is approximately 33.7 percent.

In other words, the sum of the value of all U.S engineering firms could be “ball parked”

At somewhere around $70 billion. It could be argued whether the actual number is $50 billion or $100 billion, but either way it’s a lot of value moving from one generation of owners to another, and it’s happening right now. Certainly this will be a challenge for many firms, but it’s also a huge opportunity for younger generations.

Facilitating Transition

Traditional ownership transition within the engineering industry involved the retiring generation selling its ownership interests to their immediate successors. For baby boomers and those before them, each successive generation was larger than the one proceeding. In economic terms, the “demand” for ownership (buyers) exceeded the “supply” (sellers).

In the present scenario, the exact opposite is true. Microeconomic theory tells us that in any given market, when supply exceeds demand, either price or quantity (or both) must fall to get to market equilibrium: the point where supply equals demand.

In other words, to facilitate this transition of ownership, retiring owners across the United States need to look beyond the immediate successor generation, providing greater opportunities for career advancement and ownership to their increasingly younger staff. Furthermore, without a surplus of demand, younger generations will likely have an opportunity to invest at favorable prices, giving them unprecedented opportunities to create wealth for themselves through ownership in their engineering firms.

The opportunity for young engineering professionals is there, and it’s huge. The challenge for baby boomer owners will be to recognize and cultivate the leadership potential of those young professionals, and open their eyes to the great economic benefits of becoming an owner.


You can learn how others are handling this and other ownership transition challenges by attending our annual A/E Growth & Ownership Strategies Conference on November 4-6 in Naples, Florida.  Visit
www.rog-partners.com/conference/  to learn more.  Register by Friday, September 11th and save $200!  Or call 800.543.5259 x 4 if you have questions.


2015 Mid-Year CEO Outlook

As we have every summer, we reached out to six leading A/E CEOs across the country to hear how their organizations are performing so far this year. They shared with us where they see promising avenues for growth, how they are developing their next generation of leaders, and what their summer plans are to unwind…

Darin Anderson, CEO, Salas O’Brien, San Jose, CA

How has Salas O’Brien’s performance fared so far in 2015?

Salas O’Brien has been going through an extended period of accelerated growth. At the end of this year we could hit 1000% (thousand) percent growth for the last nine years. For 2015, we have already increased billings over 50% from the previous year.  Like prior years, our growth has come from both organic (approx. 25%) and acquisitive/merger growth (approx. 25%). More importantly, we have retained our clients and in most cases, grown with them. We have been focused on building relationships…this starts with our team members. We haven’t lost a Principal or Shareholder in the last 9 years and our turnover for all team members is less than 5%. We need to always stay focused on this because it is hard to find great talent.

In what market or service areas are you seeing promising opportunities for growth?

Fortunately for us “all boats are rising” in our sectors and regions, it’s just a matter of how much. We are also getting a little more than our share of the growth. We are positioned in growing regions (Northwest, California, Texas and Southeast) that have healthier economies and we are in strong sectors such as Telecom, Data Centers, Higher Education, K-12, Municipalities and Health Care with a growing commercial/retail segment. On top of that, most of our clients are “institutional” clients that own their real estate for the long-term so we are always doing substantial renovations and expansions in addition to new construction.

In 2014, Salas O’Brien acquired a MEP firm in Houston. What was the rationale for the combination and how has the integration gone so far?

The rationale was easy, we are on the road to grow Salas O’Brien into a leading national firm of like-minded, dedicated professionals and leaders that love what they do and will make us stronger. We were (and are still) looking for several things and the recent merger hit all the critical items for us: 1) Strong and capable leadership – that want to continue in their roles with the same authority and decision making; 2) Geographic expansion – strong regional market (Houston, Dallas, Baton Rouge); 3) Outstanding client relationships (blue chip clients); 4) Longevity of technical staff and commitment to relationships; and 5) Consistent performance – both billing growth and strong earnings.

After more than one year, we haven’t lost one person from the firm and added 14 people to the region…and Houston is a HOT market. We love our new team and leaders and have worked hard to unify the team – that has happened! The leaders are well integrated into the leadership team, we have grown new market sectors regionally, expanded and added clients (from existing clients in other regions) and are cross selling and working between all of our offices like ONE TEAM! The team is having a record year!

What are the biggest concerns your clients face today?

Our clients want to ensure they have trusted advisors that are highly skilled, that they know well and care about their projects. They have to be ready to go the extra mile to ensure success. A team that is experienced, is going to be proactive, save them money, advise of possible challenges with entitlements/permits, design, energy efficiency, code compliance and that are going to ensure attention to schedule and construction budget, while having a fantastic experience. In essence, clients want and expect it all today. The expectations are high for results and performance. Communication and expectation setting are very important to establish at the outset of a project.

How does Salas O’Brien identify and develop your next generation of leaders?

We really give everyone the opportunity to grow and develop in the organization. We have so many examples of people that have started as Engineering Interns out of school and have gone on to make Principal. We have a Biology major out of school that now 16 years later is running our Construction Management division and is a shareholder. We have an administrative assistant that 14 years later is a Senior Plumbing Designer. We provide opportunities for growth through challenging them “on-the-job,” we believe leaders are “identified” through their initiative, development and distinguished work product and relationship building. We then do everything to help them grow and stretch. We are a young firm.

The average age of our Principals is 47 years old. We are energetic and passionate about the work we do and are ready to take on the world. We are entrepreneurs and do outstanding design and CM work. We don’t have ceilings or limits, we want to develop our practice leaders and reward them professionally and financially. We give them a lot of leash so they can learn and stretch themselves, but always with mentors watching and there to help coach and lead when necessary to ensure we don’t make too many mistakes. Fortunately (knock on wood), we haven’t had a PL or EO claim in our history. This is a testament to the relationships we keep, processes we follow and technical work our team delivers.

What are your plans this summer for rest and relaxation?

It’s going to be a very busy summer. I have plans with the family to go to Maui for 10 days (will ride my bike up Haleakala), then will be running the R2R2R at the Grand Canyon with some friends one day this summer, throw in a couple cycling races, then with the family for a long weekend at the Islands of the Puget Sound and finally the World Duathlon Championship in Adelaide, Australia at the end of the Summer.

Lawrence R. Armstrong, AIA, CEO, Ware Malcomb, Irvine, CA

How has Ware Malcomb’s performance fared so far in 2015?

Our performance is very strong.  We are achieving significant growth year to date, as well as throughout the past five years.  We recently opened our 17th office in Miami, Florida.  Both our revenue and profits are healthy this year.

With 17 offices across North America, in what market sector or geographic regions are you seeing promising opportunities for growth?

Every one of our offices is busy and growing right now, but we’ve seen the greatest activity in Northern California and up and down the East Coast. The industrial market has been very strong across North America.  In certain markets, especially the West Coast, the office and creative office markets are gaining momentum.

Ware Malcomb has periodically acquired architecture and interior firms for strategic expansion. What factors impact your criteria when evaluating possible targets?

First and foremost, we look to see if they are located in one of our target geographic markets.  Second, do they specialize in similar types of work that we do?  Also, will they be a good cultural fit with our company? Those are the main criteria. If they have similar clients both on the commercial real estate and corporate side, they tend to understand our type of work and the pace. Lastly, we are a very collaborative company, so they need to be that way as well.

What are the biggest concerns your clients face today?

Our client’s biggest concern is having flexibility in their real estate. Whether we are designing a large distribution center or office space for a multi-generational workforce, we need to create flexible space that can accommodate changes to their business over time.

How does Ware Malcomb identify and develop its next generation of leaders?

We have several strong training programs within the company that identify potential and emerging leaders at different levels. We provide an annual mentoring program, open to all of our employees. We encourage our employees to express their desire to grow, and we try to help support their personal and professional goals.

What are your plans this summer for rest and relaxation?

My summer plans are to travel. I have a couple trips planned with my wife, and I’m planning to spend time in my art studio.

Keith Kuzio, P.E., President & CEO, Larson Design Group, Williamsport, PA

How has Larson Design Group’s performance fared so far in 2015?

It has been good.  We were coming off a year of 15% growth and solid profitability in 2014, and we set very ambitious goals for this year. Through the first half, our sales, revenue and profit numbers all show double digit growth over last year’s performance in the same time period. Based on projections for the second half, we should see another year of very strong growth and profitability.

In what market or service areas are you seeing promising opportunities for growth?

In the transportation market, we’ve been able to capitalize on the large PennDOT P3 Rapid Bridge Replacement project that is currently ongoing.  That’s allowed us to grow our bridge and highway design staffs considerably and is giving us valuable experience in the P3 alternative project delivery approach.  We’ve been securing some significant surveying projects in transportation, energy transmission and electric generation related work. We’re also shortlisted for a large P3 project opportunity that involves public transit agency CNG fueling infrastructure and garage modifications across the Commonwealth of Pennsylvania which will be a significant project if we are successful.

Your firm has made sizable investments in the energy sector to take advantage of the shale region throughout Pennsylvania and Ohio. Has the decline in oil prices over the last year impacted that segment? 

Without a doubt, current energy prices are impacting the segment.  As early as January, many of our energy clients had re-opened and cut 2015 capital budgets and drilling programs which had a direct impact on services and fees that we were projecting for the year.  No business likes these kinds of challenges, but the current climate has given us an opportunity to know our clients and their business dynamics better. Partnering with these clients, we’ve trimmed fees where we can, and we have been focused on identifying and implementing cost reduction strategies to help lower our clients’ breakeven operating cost.  By being proactive with these efforts, we’ve built trust and are retaining clients. This should allow us to maintain performance in this sector at about the same level as in 2014.

What are the biggest concerns your clients face today?

In the public sector, the biggest concern continues to be how to fund and maintain infrastructure assets given the political and public opposition to increased taxes to support system preservation and improvements. A few public clients are trying alternative project funding and delivery processes involving P3s, but many of our clients lack the risk tolerance to implement innovative funding approaches.  In the private sector, the biggest client concerns are focused around how to maintain growth and profit margins in the midst of intensifying competition.  In both sectors, many continue to express concerns with the lackluster economic recovery that we’ve experienced over the past few years and what that means for the long-term.

 How does Larson Design Group identify and develop your next generation of leaders?

Our leadership development is still somewhat informal, but we are beginning to work toward a more holistic approach. During the past year, we have been focused on improving employee engagement and simplifying and communicating the company’s vision, values, and strategic priorities more clearly and effectively.  Also, senior leaders are listening more and closely observing and recognizing staff that demonstrate behaviors that define our company values.  Over the next six months, we will design a formalized leadership program that will be implemented in 2016. Those staff that are identified as living our values and embracing our vision for the future will be the initial nucleus of the leadership program.

What’s on your summer reading list?

I’ve just completed two very different, but compelling books on teamwork – Patrick Lencioni’s The Five Dysfunctions of a Team and General Stanley McChrystal’s Team of Teams.  I am currently working on Michio Kaku’s Physics of the Future which looks at how science will shape our lives and civilization by the year 2100. I’d also like to read Unbroken, the biography of Louis Zamperini, by Laura Hillenbrand.

Randy Neuhaus, P.E., President & CEO, S&ME, Raleigh, NC

How has S&ME’s performance fared so far in 2015?

S&ME is on target for a very good year in 2015. In fact, it will be a record setting year for us. Our performance in 2015 shows both revenue growth and increased profitability. The performance includes improvement organically as well as significant growth as a result of the acquisition of Littlejohn at the end of 2014.

In what market or service areas are you seeing promising opportunities for growth?

We are seeing improvement in most of the markets we serve. Our client base is primarily in the private sector although we serve the state and municipal markets. Transportation and Energy continue to be strong markets for us, including services to the shale gas industry in additional to major utilities. The retail/commercial market is continuing to improve and the healthcare and entertainment markets continue to be very steady for our design services.

In late 2014, you acquired Nashville-based Littlejohn, a multidiscipline engineering firm with over 130 employees. What was the rationale for the combination and how has the integration gone so far?

The leadership of S&ME recognizes that the A/E/C industry is changing. This change is a result of many forces such as the M&A activities and development of the very large and mega firms. More and more companies are offering a full line of services to their clients and in many cases the clients are developing a preference for using one firm from conception through due diligence into design and finally following through construction.

Traditionally, S&ME was a geotechnical, construction engineering & testing, and environmental firm. We believe by adding civil design, community/municipal planning, landscape architecture, economic development and redevelopment, and land surveying through the Littlejohn acquisition, we now have the ability to offer our clients services from conception to construction. As a medium-to-large size firm we believe expansion of our services was critical to our future growth. The integration is moving along smoothly and we have seen a great deal of collaboration and early success in offering this full line of services.

What are the biggest concerns your clients face today?

As the economy continues to improve we are seeing the need for additional engineers and other professionals. The market is getting tighter and finding the right talent is a continuous challenge for us. It is also important to know and understand the markets, to recognize the next “wave of opportunity” and to make sure we are on the front of the wave as the opportunity approaches.

Another challenge for firms of our size are competing with the mega firms and demonstrating that we have the capacity to service major clients on major projects. This was another reason we pursued the Littlejohn acquisition. We believe there are teaming opportunities for firms of our size to compete on any level. Funding continues to be a challenge especially for the transportation and infrastructure related markets. Everyone in the industry and political arena knows and understands that our infrastructure is in dire need of attention. The dysfunction in our State and Federal Governments to address the problem is a concern. I believe we have to educate and engage the general public to pressure government officials to develop a plan to address the long needed infrastructure spending.

How does S&ME identify and develop your next generation of leaders?

Developing the next generation of leaders is a challenge that many firms are facing today. I believe there is a great pool of talent within S&ME and we welcome the opportunity to develop this talent. We have a Leadership Development Program that is a good basis and training for the “rising stars” within S&ME. I believe this program does a very good job of identifying talent and is the beginning of the training of our future leaders. However, we also know this program isn’t the complete answer. One area we are finding a shortage of talent is in the 4 to 8 year experience level. I believe this is a result of the lack of hiring during the recession years and now we have a shortage in this experience level. We understand the future of S&ME is dependent on the next generation of leaders at all levels. We are performing an assessment to determine our leadership developments needs and to develop a process by which to address the leadership development question. This assessment is for both the short and long term leadership succession.

What are your plans this summer for rest and relaxation?

I enjoy the outdoors, hiking, fishing, mountain biking and spending quiet time in the mountains of western North Carolina. It is especially peaceful and enjoyable when our children and granddaughter join us at our place in the mountains. I also have some short trips planned that coincide with some of my business travels.

Laurie Parsons, P.E., President & Principal Engineer, Natural Resource Technology, Milwaukee, WI

How has Natural Resource Technology’s performance fared so far in 2015?

After significant growth in 2013 and 2014, our leadership team set aggressive performance goals for 2015 that we have not quite met for the first half of the year. That behind us, the outlook is positive, with a strong backlog through year-end. Our focus is continued progress on strategic plans for targeted regional expansion of our services in the environmental consulting business. .

In what market or service areas are you seeing promising opportunities for growth?

Most significantly we see promising opportunities in environmental management needs for energy and private sector clients. As the economy continues to improve, redevelopment of urban waterfronts is ramping up.  With this, we see high potential for opportunities on projects where we can deliver on our niche service expertise in contaminated sediment and in-situ remediation technology. The government sector is also steady, with increasing opportunities under small business categories along with our teaming partners in site restoration design and construction services.

Recognized by various media outlets for your growth and employee-friendly culture, NRT has expanded by adding new employees, offices and capabilities. What’s the key to managing all of that growth effectively? 

It helps to keep one of my favorite quotes top of mind: “growth is optional, change is inevitable”. At our option, growth has required that our entire team embrace constant change in the organization.  This includes fine tuning processes, shifting resources, taking measured risks, working cross teams, engagement and empowerment, and retaining top talent. I am confident this also contributes to the fact we enjoy a high staff retention rate. Effectively managing our growth would not be possible without ideas and creativity from all staff throughout the firm, in addition to insight and guidance from our external resources. It has been critical to have external business and technical advisors that share our philosophy and are willing to invest with us in long term partnerships as we grow. It is also helpful to look back as we continue to grow, and learn from our decisions, recognizing we can do it better going forward.

What are the biggest concerns your clients face today?

I would say balancing limited resources in the right areas for desired performance whether public or private clients. Specific to the environmental consulting industry, of great concern for private clients is the uncertainty of changing requirements that affect future liabilities.

How does NRT identify and develop your next generation of leaders?

For the best success, we pay attention to matching strengths to the position for our next generation of leaders. I have found it takes a continuing effort to empower and give learning opportunities to developing leaders. In the science and engineering fields, we can over-focus on technical training.  As such, we mindfully put a high priority on leadership training and coaching to effectively work in a high functioning collaborative team environment.  We also purposefully involve developing leaders in strategic aspects of managing the firm.  We set outcome-based goals where we can and let the next generation learn and be creative in attaining those goals.

What are your plans this summer for rest and relaxation?

Rest and relaxation in my case usually involves activity in the outdoor environment. Time on the water with family is a must, whether in a sailboat, powerboat, kayak or canoe. If not on the water, it will be cycling on country roads.

Will Schnier, P.E., CEO, BIG RED DOG Engineering | Consulting, Austin, TX

How has BIG RED DOG’s performance fared so far in 2015?

2015 has been a great year for us so far. We’re substantially on track to hit our business plan goals as a company and should end up the year with $13.4M in revenue, up from $9.3M in 2014. We opened our Dallas office in June, which also marks an important milestone for BRD. We’re now established in every major city in Texas with offices in Austin, Dallas, Houston, and San Antonio. The strength of the market has been very refreshing in Austin and San Antonio, which are our most mature offices. Our Houston office took a revenue hit at the beginning of the year, but more recently our projects and backlog have also increased in that office; in fact, Houston has proven quite resilient.

In what market or service areas are you seeing promising opportunities for growth?

We have an abundance of growth opportunities in Houston and Dallas; both of those offices should double in size each of the next two years. We have no shortage of opportunities in the MEP space. We’re actually choking back our growth in that service line in order to maintain quality and to focus on improving our operations with the goal of strengthening the foundation of that profit center so future growth can be more effectively managed. We’re also actively looking for strategic acquisitions in the transportation, traffic, and structural engineering fields.

In 2014, you made your first acquisition, a local mechanical, electrical and plumbing design firm. What was the rationale for the combination and how has the integration gone so far?

Our growth strategy is three fold: first, we want to expand into high growth, highly educated markets in the southwest with our core land development business; second, we want to overlay complimentary engineering services like MEP, structural, and transportation engineering onto our existing offices; and third, we want to diversify our client base to include a health mix of public revenue sources.

The MEP service line was incredibly attractive to us because of the shortage of qualified MEP consultants in our markets combined with the great track record and relationships that the Johnson Consulting Engineers team offered. We had worked with JCE for over 10 years, both as BRD and in our former roles. Their team was really good and they dominated the Austin MEP market, so it was a no-brainer when we had a meeting of the minds. Anecdotally, it feels that for every MEP firm in Texas there are probably 5 or 6 civil engineering firms.

The integration of Johnson Consulting Engineers into BIG RED DOG has been executed very well, led by our Austin President Brad Lingvai and Vice President David Johnson. The MEP team has moved into our Austin headquarters and we’ve doubled their headcount, client list, and monthly revenue since November 2014. All of that during a time when I tell you we’re choking back the growth – we could easily have grown five-fold during the same period, but at what expense? Not a single MEP team member has left us for competitor, so we’ve done a good job of explaining what’s happening and making the team members be a part of the planning and ultimately the success of the venture.

What are the biggest concerns your clients face today?

Costs are going up and this development cycle is getting a bit long in the tooth. We have represented to our team members that we are at the start of the 4th quarter of this upward development cycle and our clients feel that pressure too. We think there are 2 years left before we see a softening of the revenue. In terms of the cost concern, everything is going up. Cost and schedules are being extended further. Clients are seeing great difficulty in getting certain trades on their job site and the same pipe that a utility sub would have installed in 2010 is at least 20-40% more today.

BIG RED DOG started in 2009 and is one of the fastest growing engineering firms in Texas, with nearly $10 million in 2014 annual revenue, all while adding new managerial talent, systems, and processes. What’s the key to managing all of that growth effectively?

There are three big keys for us: first, the team we have assembled is best in the state in my opinion;, second, the clients with whom we partner are market leaders in their own right; and third, the State of Texas is experiencing the greatest migration wave of US citizens in the past two decades. We’re in a perfect demographic storm in Texas with over 1,000 people moving to our markets every day of every week. When you take those demographic trends and combine them with outstanding staff and clients, the growth becomes much more manageable. Our clients demand fast results, exceptional communication, and fair billing, and we’ve been able to consistently deliver that, which keeps them coming back and causes them to spread the word about the performance and capability of our firm. Our management team is excellent and is getting stronger every single month that we’re in business. Seven of our nine officers are still under 35 years old today, so we have plenty of runway to continue our growth and in a few years’ time we’re just be getting to the prime of our careers.

Our business plan has us reaching the $100M revenue mark by 2024. So we’ll have to build 10 more BIG RED DOG’s all the while we continue to successfully manage the first one we’ve built. Growth is important. It’s more fun than managing a company not growing or a company that has revenue problems. It also creates opportunities for our people to step up and become leaders or officers or shareholders of the company.

What are your plans this summer for rest and relaxation?

Our family is planning on taking a few shorter vacations. We’ve got a week planned at Hyatt Lost Pines in August and prior to that we’re planning on taking a trip to Big Bend and Ruidoso, New Mexico. If our 8 year old has her way, we’ll also make a stop at Disneyworld this summer.

Please join us in November for the only conference for A/E executives focused on Growth and the
Creation of real and sustainable value in their organizations…



The Secret Recipe for a Successful Ownership Transition

I’ve had the pleasure of working with many successful A/E firms over the years, ranging from small, first-generation firms, to companies that have been operating continuously for 50 years or more (including some that were founded in the late 1800s). I’ve always taken an interest in understanding how firms that have survived through multiple generations of ownership have accomplished such a feat. From my anecdotal observations, I’ve concluded that while there is no single recipe for a successful ownership transition, there ARE a number of common ingredients.

These “success ingredients” often include legal or financial aspects of transition plans, such as how a firm values its shares, how stock redemptions are financed, and whether shareholders are bound by non-compete agreements. But they can also include cultural or human resource matters, such as how internal communications are handled, how a company is structured organizationally, how concentrated or distributed its ownership is, how new leaders are trained and groomed, and how new owners are selected.

Firms that have managed their way through multiple generations of ownership may have learned the key ingredients though many years of trial and error, but owners nearing retirement age have precious little time for experimentation, and the penalty for failure is high.

A successful transition ensures the continuity of the business, provides job security for the staff, and a healthy return on investment of the company’s shareholders. A failed transition could leave a company with no choice but to shut its doors—leaving clients in the lurch, employees without jobs, and shareholders with little or no value for their stock.

Wouldn’t it be great if there was a single resource detailing the practices of A/E firms with respect to ownership structure and ownership transition–a resource that first generation firms could use to discover those “key ingredients” for a successful ownership plan, and that well-established firms could use to benchmark and refine their plans and policies? What if such a study went even further—analyzing and isolating best practices, and allowing a firm to compare its own ownership structure and policies to those of its peers?

I’m pleased to announce that together with the research and publishing firm Practice Lab, we are developing just such a resource. But we need your help. We invite you to participate in this confidential on-line survey by clicking on the button below:

Start Survey

Below are just some of the topics the survey will cover:

  • The prevalence of various corporate structures
  • Ratios of owners to staff
  • Ownership interest distribution / concentration
  • Stock valuation methodolgy
  • Stock redemption financing terms
  • Stock purchase financing terms
  • Employee stock ownership plans (ESOPs)
  • Phantom stock and stock appreciation rights (SAR) plans
  • Shareholder agreement terms and provisions
  • Non-compete and non-solicitation agreements
  • Transition planning and modeling
  • Profit distribution polices
  • Composition of board of directors

As a participant, you’ll receive a summary report of the findings together with commentary and analysis on the state of ownership transition in the A/E industry. You will also have access to personalized online reports comparing your answers to the survey findings.

I hope you’ll take a moment to participate in the survey be a part of this important new study.

The Dilemmas of A/E Family Ownership

Over the past several years, we have witnessed an increased demand for ownership transition and M&A consulting for family-owned A/E and environmental consulting firms. These inquiries have cut across the gamut of family ties – husband/wife, siblings, and parent/child owned organizations. They have also come to us across a range of firm size, disciplines, and geographic locations.

When many think of family-run businesses associated with our industry, it’s traditionally been with our friends at general contractor firms (think of how many companies end with “& Sons” or “Brothers” as it relates to family construction dynasties). Most A/E firms are not family owned and have disparate individual backgrounds in terms of professional ownership, management, and overall day-to-day operations.

We think the severe design recession changed this to some degree. Hungry entrepreneurs itching for their own business as well as numerous displaced A/E professionals reluctantly started their own small boutiques. These individuals often initiate the business out of their home and may even tap into the assistance of a spouse to “do the books”, create a website, or utilize family savings and credit cards for seed capital. In addition, as building and infrastructure demand waned starting in 2007, some shrewd firms brought a licensed spouse to the ownership fold as a 51% WBE (woman business enterprise) or other similar maneuvers to attract new clients and project types.

Maybe we shouldn’t be surprised after all. Family businesses are “the most common type of business on the earth, particularly in developing countries,” says Professor Wesley Sine, faculty director of the Cornell University Johnson Graduate School of Management’s Entrepreneurship and Innovation Institute. In addition, The Family Firm Institute (FFI), a nonprofit, has reported that family firms create an estimated 70 to 90 % of global GDP annually as well as 50 to 80% of jobs in the majority of countries worldwide. Many owners and entrepreneurs start out with financial and emotional support from family; in fact, the FFI reports that a whopping 85% of startups are established with family money!

Many family-owned A/E firms have wonderful characteristics. They can often possess a close “paternal/ maternal” company culture where treating and protecting employees just like family members guides their decision making and interactions. These organizations can be slow to fire dedicated team members purely for bottom line results and oftentimes have a “we’re all in this together” family mentality when times are good or bad for organizational resiliency. As a result, family-run A/E organizations may exhibit higher employee loyalty and retention rates and their staff may cultivate a deeper commitment to the firm’s mission and values.

However, we can all admit family dynamics and relationships can be complicated. Issues such as rivalries, resentment, drama, jealousy and entitlement can be found among relatives in professional organizations. And in the context of family businesses and pursuing sound ownership transition, these problems can frequently be exacerbated.   Below are four typical challenges we find with family-owned A/E firms:

  • Which takes strategic priority – business or family pursuits?  The most confounding aspect of family-owned firms can be what exactly is its strategic mission or purpose. Many owners will tell you it’s to offer exemplary engineering, architecture or scientific services, making communities and society better, and serving its clients and staff just like their non-family competitors. But it candidly may also serve first and foremost as a vehicle for family wealth, children or sibling employment, or closely-held decisions and control. Should profits be reinvested in the A/E firm for growth or is it fair to extract those for other family pursuits, like ancillary business ventures or real estate investments? Employees can grow confused and resentful in the presence of non-productive family members’ excessive vacations and perquisites, and personal squabbles that spill over into business matters.
  • Ownership may not be available to “outsiders” The Godfather movies were a classic case study in tight organizational kinship and control. Members and associates who were not “blood” and part of the family lineage could never be fully welcomed into the Corleone Empire. This is indeed the case with many family A/E firms we have encountered. Oftentimes, A/E family ownership is quite complicated, commingled with estate and tax planning goals designed to protect the “nest egg” for inheritance purposes. Some fear that opening the books to new employee-owners is a slippery slope to entangling insiders and outsiders, between those who are loyal and those who eventually may not be. As such, it is common to see A/E firms offer other means of retention and recruitment models other than direct equity ownership, such as higher salaries and bonuses, non-voting classes of stock, and phantom stock, stock options, or synthetic equity programs in order to have a participatory upside to overall company performance.
  • Leadership succession can be thorny – Making the leap from a first generation owned and led firm to the next one is a struggle for A/E firms of all shapes and sizes. The firm’s ethos and culture is often part of the founder’s “cult of persona”, whether a family-run firm or not. In many family organizations it is clear, and even unspoken, that the founder’s son or daughter will be next in line to take over the business. But what if that possibility isn’t there or, worse, the organization’s staff knows that “junior” doesn’t have the skills or acumen to be in charge? Should a new insider be elevated or an external candidate found to be the next CEO? Can that person effectively juggle the dichotomy of “family business” vs. “design business”?
  • They can be difficult to sell – If a harmonious internal succession plan to other family members isn’t available, these firms may attempt to test the waters and sell to an outside buyer. We have experience and anecdotes in taking husband/wife, co-sibling, and parent/child ownership teams out to market. Surprisingly, in cases where the strategic, synergistic and valuation expectations are aligned between buyer and seller, family relationships and governance are often minor worries, and a transaction can be consummated. In other cases, strategic buyers from the start are simply leery of stepping into a family-run A/E firm. Larger firms may have “nepotism” rules that prevent direct family member reporting relationships. In other cases cultural and communication differences as well as integrating family members into new organizational roles may be too difficult to overcome.

Is your A/E firm feeling a bit like “All in the Family” in terms of organizational and transition challenges and achieving your long-term goals? Let us know. ROG+ Partners brings years of seasoned financial and business experience in navigating A/E and environmental clients of all backgrounds through strategic and ownership alternatives in an ever changing landscape.

Are architectural practices less valuable than engineering and environmental consulting firms?

That seems to be what the data from the newly released 2015 A/E Business Valuation and Merger & Acquisition Transactions Study suggests.

The study, which examined actual stock transactions among A/E and environmental consulting firms nationwide over the last three years (over 230 in all) showed a notable difference between valuation multiples (specifically earnings multiples) of architecture firms, and those of engineering and environmental consulting firms.


Other valuation multiples showed a similar difference. But architectural firm owners shouldn’t lose heart. “One or two valuation multiples don’t always tell the whole story” cautions accredited business appraiser and contributing editor to the study, Ian Rusk. “Financial performance metric data from the study also showed that the participating architecture firms had some of the highest profit margins in the sample, and the values of those firms on a per employee basis were some of the highest.”

Developed in cooperation with the National Center for Employee Ownership (NCEO) and Business Valuation Resources (BVR), the 2015 A/E Business Valuation and M&A Transactions Study, now in its second edition, is sthe only true study of actual ownership transactions in the industry. It examines the actual prices at which ownership interests of firms in the industry have changed hands, including internal transactions, ESOP transactions, and strategic mergers and acquisitions.

The study also examines the pricing trends among publicly traded A/E firms, and presents all the data, segmented by transaction type, firm type, etc. The study also includes an analysis of how M&A transactions are structured as well as 19 separate financial performance benchmarking ratios derived from the participating firms, all broken down by firm type.

“This study is like several unique surveys in one. It’s a source of true ‘comparable sales’ data for business valuation professionals, it can be used by business owners to benchmark the value of their own firms, it’s a source of market data on controlling interest values and deal structures for firms considering a merger or acquisition, AND it can be used as a source of financial performance benchmarking data” says Rusk.

The 2015 A/E Business Valuation and M&A Transactions Study is available for online purchase at www.rog-partners/aestudy. Or for more information, call Michael Kearney at 617-274-8051 ext 508.


2015 A/E Business Valuation and M&A Transaction Study (1/12/2015)

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