Word on the Street: Issue 205

Best Post-Transaction Performance Award Application Window Opens Today

Introduction and Context

The Best Post-Transaction Performance Award recognizes those firms that deliver superior positive business impacts through their acquisitions. It is the third of three annual awards in our Excellence in Acquisitive Growth Awards series. 

With industry consolidation continuing at a transformational pace of over 450 transactions a year, we created the Awards series for two very specific reasons. First, to recognize those acquirers that are improving the industry through acquisitions. And second, to provide a forum to share M&A best practices so that collectively the industry achieves better outcomes in terms of client satisfaction, employee engagement, and value for investors.

Performance Defined

Last year, in a first for the industry, the Best Post-Transaction Performance Award established a simple, objective, universal benchmark to assess the post-transaction performance of an acquisition. We developed this benchmark, the Acquisition Performance Indicator (API), in two ways. First, through discussions with industry acquirers and investors. Second, by leveraging our experience in advising on over 240 AE and environmental firm transactions. 

The API takes a holistic view of any acquisition. Rather than focusing solely on financial indicators, it assesses performance in the areas of revenue, profit, backlog, and voluntary turnover in the 12 months following the closing of the transaction.

The revenue and profit elements indicate top- and bottom-line improvements, speaking to return on investment. The backlog element is an indicator of sales and marketing improvements. The voluntary turnover element reflects post-transaction improvements in employee engagement and connectivity. 

2023 Award Recipients

Size matters. It takes longer for a battleship to change course than it is for a dinghy. The same can be said for acquisitions. The larger the acquisition, the longer it takes to see meaningful improvement. Recognizing this variability, we established three size categories of award recipients. The first is for acquired firms with over $50 million in revenue, the second for acquisitions between $10 million and $50 million in revenue, and the third for acquisitions of less than $10 million in revenue.

Last year’s Award recipients in each of these size categories were, respectively, TRC Companies (Windsor, CT) (ENR #16), Salas O’Brien (Santa Ana, CA) (ENR #54), and Englobe (Montreal, Canada).

Lessons Learned

Last year’s Award revealed for the first time just how good the best industry acquirers are at improving business performance through acquisitions. Here are four of the biggest takeaways from last year’s applicants:

• On average, acquirers are doubling the profits of their acquisitions a year after completing the transaction. 
• Acquirers have seen the backlogs attributable to their acquisitions grow, on average, 44% within a year of the transaction.
• On average, acquirers have been realizing a 33% increase in revenues attributable to their acquisitions one year after completing transactions. 
• Acquirers have been seeing voluntary turnover rates decline by almost one-fifth a year into their transactions. 

2024 Award Eligibility and Application

Eligibility for the award is limited to firms that have made an acquisition of an AE or environmental consulting firm between January 1, 2018, and August 1, 2023.

We’ve designed the application process to be simple, fast (it should take no more than 30 minutes of your time), and confidential. It requires no proprietary financial information. All applicants will receive a benchmarking report comparing their acquisition performance to those in their chosen size category.

So, if you believe that an acquisition you’ve made deserves recognition by the industry, then we invite you to begin the application process by clicking the button below.

The window for applications is open until Friday, September 13. 

Awards Ceremony and Recognition of Recipients

This year’s Awards will be presented at the Texas and the South M&A and Business Symposium at the Post Oak Hotel at Uptown Houston, October 16-18. Awards will be presented to the acquirers that report the highest APIs in each of the three size categories. 

In addition to the Awards and the accompanying industry recognition, Morrissey Goodale will make a $1,000 donation to an AE industry-related 501(c)(3) organization chosen by each recipient. We will also feature each award recipient in an upcoming edition of Word on the Street.

If you have any questions about whether your firm is eligible to apply for the award or about the application process itself, please contact our awards department at [email protected]. 

From Blueprints to Beach Chairs—10 Ways to Maximize Your Vacation Time

As you read this, I’ll be on safari in Africa. Now, my idea of a summer vacation is plopping down on the beach with a good book, strolling back to the cottage for lunch, and maybe taking a nap—not running for my life from a lion. But alas, vacation decisions are not mine alone to make. Nevertheless, I am excited to be exploring this amazing continent for the first time.

Perhaps you’ve already taken your vacation or you’re simply too busy to take time off, but for those who still have their summer break ahead, here are 10 tips for you to get the most out of your time away from work:

1. Plan ahead (but not too much)

As an AE firm principal, you’re probably used to meticulous planning. Gantt charts and timelines are your bread and butter. However, while a bit of planning is essential for a successful vacation, remember to leave some room for spontaneity. You don’t need a minute-by-minute itinerary. Instead, have a rough idea of what you’d like to do, but allow for those unexpected adventures—like finding the perfect hidden beach or stumbling upon a quaint village.

2. Delegate like a pro

One of the toughest parts of taking a vacation is stepping away from your work. Your team relies on you, and it might feel like the sky will fall if you’re not there. Trust me, it won’t. Delegate responsibilities to your trusted colleagues before you leave. Ensure that everyone knows their roles and has access to necessary resources. Consider setting up a point of contact who can make decisions in your absence. Remember, effective delegation not only gives you peace of mind but also empowers your team and helps them grow.

3. Disconnect to reconnect

We live in an era where we’re constantly connected. Emails, Teams messages, and project updates can follow us everywhere, even to the most remote locations. Set boundaries for your digital devices. Inform your team and clients that you’ll be offline and stick to it. Designate specific times if you must check in, but otherwise, let yourself be present in the moment. You might be surprised at how refreshing it is to disconnect and enjoy your surroundings.

4. Indulge in your hobbies

Vacation is the perfect time to indulge in your hobbies or even discover new ones. Whether it’s reading that book you’ve been meaning to get to, taking up painting, or exploring underwater worlds through scuba diving, engaging in activities you love will help you unwind and recharge. These moments of fun and relaxation are what vacations are all about.

5. Explore new cultures and cuisines

Apply the creativity you summon at work to your vacation. Immerse yourself in the local culture, try new foods, and interact with locals. Whether it’s savoring street food in Bangkok, learning to tango in Buenos Aires, or participating in a traditional tea ceremony in Kyoto, these experiences will broaden your horizons and provide fresh perspectives that can be surprisingly useful when you return to work.

6. Embrace the power of nature

There’s something inherently rejuvenating about spending time in nature. Whether it’s hiking through a national park, snorkeling in a coral reef, or simply lying on a beach listening to the waves, nature has a way of recharging our batteries. Time spent in natural settings can reduce stress, improve mood, and increase overall well-being. So, give a mountain trail a try, or maybe roll a hammock under a grove of palm trees.

7. Balance adventure and relaxation

While it’s great to have some adventurous activities on your itinerary, don’t forget to balance them with relaxation. For every day of zip-lining through the jungle, have a day where you lounge by the pool. This balance will ensure that you return from your vacation both exhilarated and rested, rather than needing a vacation to recover from your vacation.

8. Capture memories, not just photos

Allow moments to savor your vacation experiences in real-time. Sure, take photos to capture memories, but also truly be there. Otherwise, instead of surfing real waves, you might as well just surf the internet for pictures that will be pretty close to the ones you’d have taken anyway.

9. Reflect and reset

Vacation is a great time for some personal reflection. Take a little time (I repeat, a little time) to think about your goals and aspirations. What do you want to achieve in the next year, both professionally and personally? Use this time to reset your priorities and return to work with a clear mind and renewed sense of purpose and vigor.

10. Bring a bit of vacation home

Once you’re back, try to incorporate some of the relaxation and fun of your vacation into your daily life. Maybe it’s enjoying a quick breakfast on your porch, setting aside time for a hobby, or planning short weekend getaways. These small changes can help maintain the vacation bliss and keep stress at bay.

As I continue my safari adventure, dodging the occasional lion and marveling at the beauty of the African savannah, I’m reminded that the true essence of a vacation is to relax, explore, and rejuvenate. Whether you’re exploring the wild plains of Africa or simply enjoying a few days off closer to home, the key is to make the most of your time away from work, so you return to your firm with renewed energy, fresh ideas, and perhaps a few stories to share.

Happy travels!

Any vacation stories to share? Text Mark Goodale at 508.254.3914 or email [email protected] (just don’t expect an immediate response)

Market Snapshot: U.S. Cities and Towns

Based on the latest U.S. Census Bureau’s population estimates for incorporated places of 20,000 residents or more, small towns in the Midwest and Northeast experienced lower rates of decline and many larger cities in these regions have reversed earlier losses. Meanwhile, small-town population growth slowed in the West and accelerated in the South. We analyzed the city and town population datasets and extracted a few insights, which are listed below.

• Three Texas cities (Celina, Fulshear, and Royse City) had compound annual growth rates (CAGR) above 20% over the last four years. Another 16 cities had double-digit growth rates, with 10 of those also being in Texas.
• Some cities have significantly picked up the pace of growth in 2023 (based on comparison against the four-year CAGR):

• Odessa, Texas
• White Plains, New York
• Ocala, Florida
• Greeley, Colorado
• Weymouth, Massachusetts
• Doral, Florida
• Atlanta, Georgia
• Redmond, Washington
• Midland, Texas
• Lehi, Utah

• Cities with population estimated between 50,000 and 500,000:

• Top five by four-year CAGR (2020-2023):

• Georgetown, Texas
• Saratoga Springs, Utah
• Kyle, Texas
• Leander, Texas
• Eagle Mountain, Utah

• Top five by numeric change from 2022 to 2023:

• Port St. Lucie, Florida
• Georgetown, Texas
• Raleigh, North Carolina
• Denton, Texas
• Cape Coral, Florida

• Cities with population above 500,000:

• Top five by four-year CAGR (2020-2023):

• Fort Worth, Texas
• Charlotte, North Carolina
• San Antonio, Texas
• Jacksonville, Florida
• Oklahoma City, Oklahoma

• Top five by numeric change from 2022 to 2023:

• San Antonio, Texas
• Fort Worth, Texas
• Charlotte, North Carolina
• Jacksonville, Florida
• Atlanta, Georgia

To learn more about market intelligence data and research services offered by Morrissey Goodale, schedule an intro call with Rafael Barbosa.

Weekly M&A Round Up

Three deals in the South: Last week we reported on three more deals in the South—two in Texas and one in Arkansas. Registration for this year’s Texas and the South M&A and Business Symposium opened this week. Reserve your place and join over 200 AE and environmental consulting industry executives and investors in one of the nation’s most dynamic and fastest-growing cities for our biggest symposium of the year.