Ain’t No Stoppin’ Us Now, We’ve Got the Groove

This week’s title comes from that 1979 banger by McFadden & Whitehead (they kind of sound like they might be a Midwest structural engineering firm). And it neatly describes the vibe last week at our Texas and the South M&A and Business Symposium. Most of the 200 AE industry executives, investors, and experts gathered were feeling pretty, pretty, pretty good about how 2024 was ending up and the outlook for 2025. Here’s a quick summary of events from your Morrissey Goodale team on the ground.

1.  Q4 “State of the Industry”:

 
Nick Belitz, Principal
Morrissey Goodale (Denver)


The “State of the Industry” is best described as anywhere from good to great (with a nod Jim Collins) and also financially growing and firmly grounded. To kick off the symposium, Megan Miller of Deltek shared a treasure trove of industry performance metrics from their latest Clarity A&E Industry Survey, and we supplemented that with as-close-to-real-time-as-possible YTD Q3 data from our research and clients. Together we showed how the AE industry, by and large, is enjoying increasing revenue, robust profits, and strong and stable balance sheets. With backlogs stretching into years and long-term growth expectations driven by the core infrastructure markets of transportation, water, and energy and buildings markets such as data centers, firm leaders and owners are making strategic investments in people, acquisitions, and technology to capture as much market share as possible.

2. Recognizing the industry’s leading acquirers: The venue for the presentation of the 2024 Best Post-Transaction Performance Awards was the ballroom of the five-star Post Oak Hotel at Uptown Houston. Tetra Tech (Pasadena, CA) (ENR #3) received two Awards. The first was in the size category of acquisitions of greater than $50 million in revenues. The second was for acquisitions between $10 million and $50 million. Accepting the Awards on behalf of Tetra Tech were CEO Dan Batrack and Jim Wu, VP Corporate Finance and Treasurer. Tetra Tech chose Engineers Without Borders as the beneficiary of the $2,000 donation made by Morrissey Goodale to accompany the two Awards. In the size category of acquisitions of less than $10 million in revenue, KCI Technologies (Sparks, MD) (ENR #56) was this year’s Award recipient. Accepting the Award on behalf of KCI was Chairman Nate Beil. KCI management chose the ACE Mentor Program as the beneficiary of the $1,000 donation that accompanies the Award.

Dan Batrack and Jim Wu of Tetra Tech with the firm’s Excellence in Acquisitive Growth Awards

Nate Beil of KCI Technologies with the firm’s Excellence in Acquisitive Growth Award

3. “CEO Strategy Panel”—The future of the AE industry: Candor. Optimism. Insight. Confidence. Empathy. Vision. Resilience. And more than a dash of humor, with a smidgen of banter. These were just some of the characteristics and features of a thoroughly entertaining and engaging panel discussion with the CEOs of three of the industry’s fastest-growing firms. John Baker, Chairman and CEO of Thompson Holdings (Mobile, AL) (ENR #200); Neil Churman, President of Woolpert (Dayton, OH) (ENR #47); and Andra Kidd, CEO of Spheros Environmental (Denver, CO) (ENR Environmental Firm #188) covered everything from the upcoming election (which administration would be better for the AE industry?) to what happens when all the IIJA money runs out (hopefully we’ll all be retired). Expertly moderated by Karen Erger of Lockton, other topics included hot and cold markets in 2025 (shout out to the emerging small modular reactor (SMR) initiatives driven by data centers/AI), how long this record industry performance will last (three to five years was the consensus), future AE industry workplace models—in the U.S. and overseas (pro tip, power and air conditioning are kind of important if you want folks to come into the office), and what clients will be looking for from the industry in the future (more advisory, less order-taking).

4. “The AI Imperative: A Trailblazer’s Perspective”:

 
Brendon Cussio, Principal
Morrissey Goodale (Denver)


Javier Baldor, CEO of BST Global, made a compelling case that the future of our industry is selling value instead of hours. In a wide-ranging presentation, he skillfully crafted the narrative of why firms need to be using AI and machine learning to design better, design faster, and design with data-driven insights. If AI and big data are not part of your strategic plan, you are already behind. 

5.  Insight from the experts—“Buyers Best Practices Panel”:

 
Lisa Elster, M&A Consultant
Morrissey Goodale (Boston)


We gained valuable insights from leading industry dealmakers Brian Kirkpatrick, Director of Corporate Development, Pape-Dawson (San Antonio, TX) (ENR #93); Daniel Ferguson, CFO at The HFW Companies (St. Louis, MO) (ENR #242); and Trevor Garfield, Director of M&A at Westwood Professional Services (Plano, TX) (ENR #83). They shared their experiences driving rapid growth through a blend of organic expansion and strategic acquisitions. With strong industry tailwinds propelling them forward, they emphasized that now is a great time to acquire in the AE industry!

6. Somewhere over the rainbow—“Sellers Share Their Stories Panel”:

 
Nate Wentworth, Senior Consultant
Morrissey Goodale (Denver)


Growth and expanded opportunities were the core drivers that led the two CEOs—Cristina Criado, Vice President of the Dallas office of Texas powerhouse Dunaway (Fort Worth, TX) (formerly President/CEO of CRIADO & Associates), and Michel Maksoud, Senior Director of Texas Operations at Gannett Fleming (ENR #29) (Camp Hill, PA) (formerly CEO of DEC)—to transact earlier this year. Both firms were experiencing demand from clients to grow—fast. And for both of these iconic Texas firms, combining with a larger firm through a sale was the preferred approach. Selling isn’t always an exit plan. Oftentimes it’s a catalyst for expansion and employee (and leadership) advancement. 

7. Words of wisdom from the 1000 Club:

 
Katharine Van Leer, M&A Consultant
Morrissey Goodale (Durham, NC)


One thing you can always count on from “The 1000 Club” is an M&A jam session featuring the best tax, legal, and M&A advisors in the industry. This session highlighted the expertise of Darren S. Black, J.D., National Professional Services Practice Leader of Risk StrategiesGeorge E. Christodoulo, Partner with Lawson & Weitzen, LLPDavid M. Sullivan, Partner with PKF O’Connor Davies; and Morrissey Goodale’s own Brendon Cussio, Principal. The panel discussed a range of topics including interest rates, infrastructure spending, deal structures, new tax laws, insurance trends, and everything in between. Buyers are becoming increasingly sophisticated in how they present consideration and opportunities to sellers. What’s the good news? No one anticipates any signs of a slowdown in the coming year. We may even see new buyers entering the AE and environmental industry, which will continue to inspire creative ways to get deals done.

8. From Wall Street to Y’All Street:

 
David Thornhill, Vice President
Morrissey Goodale (New York)


Dr. Ray Perryman of The Perryman Group, unofficial state economist of Texas, entertained and educated everyone with stories, facts, and predictions. Key takeaways included the southern movement of financial services, the continuing growing needs for infrastructure (especially water and power), and the government’s awareness of its need to invest in health care and life sciences.

9. Unprecedented M&A activity and valuations:

 
Jon Escobar, Principal
Morrissey Goodale (Chicago)


I took the stage with my partner Nick Belitz to share our Q4 perspectives on industry M&A activity, trends, and valuations. Activity-wise we are bumping along at about 450 transactions a year. We’re expecting to see this jump to 500 in 2026. Trends-wise, private equity (PE) is the big story. PE recaps and PE-backed acquirers now account for 42% of all transactions—at the expense of employee-owned buyers. Valuations-wise, as Brian Kirkpatrick of Pape-Dawson proclaimed on the Buyers Panel, “It’s a seller’s market!” Valuations are at or close to all-time highs.

10. Thank you to our sponsors, partners, and exhibitors! We had three goals for this symposium. The first was to bring real-time intelligence and data to the attendees on the trends that are transforming the industry so that they are armed with information to make better strategic decisions. The second was to share best practices in the areas of M&A, strategy, and business management. The third was to provide a unique forum for attendees to connect with strategic partners, buyers, sellers, and experts. We would like to thank our sponsors and partners who are (a) experts who know the AE industry inside and out and (b) help us deliver on achieving our three goals every single symposium. Our sponsors and exhibitors last week were DeltekLocktonRisk StrategiesBST GlobalCTAFull Sail PartnersLawson & WeitzenPKF O’Connor DaviesMorningstar Law GroupACEC Retirement TrustalliantgroupQuireThrivence, and WPM Technology. Our content partners were DEC/Gannett FlemingCRIADO/DunawayThe HFW CompaniesPape-Dawson EngineersThe Perryman GroupSpheros EnvironmentalThompson HoldingsWestwood Professional Services, and Woolpert. Our production partners were ACEC TexasACEC Louisiana, and ACEC Tennessee.

The message was loud and clear in Houston—these are great times to be an owner of an AE or environmental consulting firm. Maybe even the greatest. And for most of the industry, it’s still full steam ahead. Ain’t no stoppin’ us now…

We’ll be hosting three 2025 symposiums in Miami (March), Las Vegas (June), and Houston (October). Click here to view details and updates on all three symposiums.

To contact Mick Morrissey, email him at [email protected] or text him at 508.380.1868.

Weekly M&A Round Up

Congratulations to Moore Engineering (Valley City, ND): The civil, surveying, and water-related engineering firm acquired Lytle Water Solutions (Lakewood, CO), a water resource engineering firm specializing in surface water and groundwater resources. We feel privileged that the Moore Engineering team trusted us to initiate and advise them on this deal.

A total of 13 domestic transactions were announced last week: Last week we reported domestic deals in CO, OK, IL, FL, ID, SC, NY, TN, IA, PA, CT, and VA. Internationally, deals were announced in Australia and Canada. You can check all the week’s M&A news here.

AI & Innovation

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Our Board of Directors candidate database has over one hundred current and former CEOs, executives, business strategists, and experts from both inside and outside the AE and Environmental Consulting industry who are interested in serving on Boards. Contact Tim Pettepit via email or call him directly at (617) 982-3829 for pricing and access to the database.

Are you interested in serving on an AE firm Board of Directors? 

We have numerous clients that are seeking qualified industry executives to serve on their boards. If you’re interested, please upload your resume here.

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