Word on the Street: Issue 233

Application Window for M&A Best Practices Award Opens Today

The 2025 M&A Best Practices Award

Today, the application window opens for the M&A Best Practices Award—the second of the three annual Awards in our Excellence in Acquisitive Growth Awards series.

To be considered for this Award, applicants must describe a process, initiative, technique, or strategy their firm deploys in either (a) deal-making or (b) integration of acquisitions that they consider worthy of recognition as an industry “best practice”—one that could be emulated by other acquirers aiming to achieve superior results. 

The Award ceremony for this year’s M&A Best Practices Award will take place at the 11^th annual Western States M&A and Business Symposium in June. The venue for this year’s symposium is once again the luxury five-star Wynn Hotel in Las Vegas where over 200 AE industry executives and investors will be in attendance.

This year’s recipient will join previous M&A Best Practices Award honorees Terracon (Olathe, KS) (ENR #18) and Trinity Consultants (Dallas, TX).

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

If you would like your firm to be considered for the M&A Best Practices Award, we invite you to complete the simple application here. The application should take no more than 20 to 30 minutes to complete. The application window closes at midnight Eastern on Friday, May 9. The Award recipient will be notified in early June. If you have any questions, please contact our awards department at [email protected]. 

The Excellence in Acquisitive Growth Awards series

We created the Excellence in Acquisitive Growth Awards series for two reasons. First, to recognize those acquirers that are in the vanguard, improving how consolidation happens in the AE industry. Second, to share best practices so that collectively the industry achieves better outcomes from M&A in terms of client satisfaction, employee engagement, and value for shareholders.

The series is composed of three annual Awards. In addition to the M&A Best Practices Award recipients mentioned above, the other two Awards in the series and their recipients are as follows:

• Most Prolific and Proficient Acquirer Award: Recipients of this Award include this year’s honoree, Trilon Group (Denver, CO); last year’s recipient, Bowman Consulting Group (Reston, VA) (ENR #78); and 2023’s awardee, IMEG (Rock Island, IL) (ENR #52). 
• Best Post-Transaction Performance Award: The recipients of this Award include in the acquisitions larger than $50 million category, Tetra Tech (Pasadena, CA) (ENR #3) and TRC Companies (Windsor, CT) (ENR #16); in the acquisitions between $10 million and $50 million category, Tetra Tech again and Salas O’Brien (Santa Ana, CA) (ENR #39); and in the acquisitions of less than $10 million category, KCI Technologies (Sparks, MD) (ENR #56), and Englobe (Montreal, Canada).

The big picture

Industry consolidation continues at a transformational pace of more than 450 transactions a year. (We’re on track to hit almost 500 deals in 2025.) Over the past decade, better than 3,800 design and environmental firms have sold or merged in the United States. Those acquisitions have resulted in step-function increases in profits, revenues, and backlogs for the acquiring firms.

Industry consolidation will continue to increase over the next decade, fueled by the dual complementary trends of (a) industry recapitalization by private equity and (b) boomer and Gen X owners unable to transition ownership internally. 

Recognizing that this wave of consolidation will impact all domestic design and environmental firms, we believe that it’s in the best interests of all industry stakeholders—project owners, firm shareholders, managers, and employees—that consolidation takes place in a manner that creates greater value, more stability, enhanced client service, and improved resource allocation.

Engagement

So, if you would like your firm to be considered for the M&A Best Practices Award, we invite you to complete the simple application form here. Again, the application should take no more than 20 to 30 minutes to complete. The Award recipient will be notified in early June. If you have any questions, please contact our awards department at [email protected]. 

You can contact Mick Morrissey at [email protected] or 508.380.1868.

Is Your Target Market Starting to Soften?

You’ve had a good run. No, a great run. Backlog is strong. Your teams are busy. Margins are solid. Not too long ago, you were turning away work. But lately, you’ve noticed something a tad unsettling—maybe fewer RFPs, a couple of delayed projects, or a key client pulling back on spending. It’s subtle, but it’s there: One of your main markets is showing signs of softening.

Before you go full Chicken Little, take a breath. The sky isn’t falling. But it would be a mistake to ignore what could be early warning signs. The smartest AE firm leaders know that downturns—whether mild, sector-specific, or full-blown recessions—are part of the cycle. The key is to act early, act smart, and position your firm for whatever comes next.

Here’s your playbook:

1. Diagnose the Slowdown: Is It a Blip or a Trend?

First, figure out whether this is a passing phase or a real shift in your market. Look at:

• Your pipeline. Are leads drying up? Are project delays becoming cancellations?
• Client budgets. Are they cutting back on scope? Holding off on new work?
• Industry trends. Are other firms in your space seeing the same thing?
• Economic indicators. Interest rates, real estate cycles, infrastructure funding—are external forces at play?

Talk to your business developers and project managers. Often, they’ll have a gut feeling before the numbers fully show it.

2. Lock Down Your Key Clients

When markets tighten, competition for work heats up. The clients who’ve always come to you may suddenly have more firms knocking on their doors . Now is the time to:

• Deepen relationships. Get in front of your best clients. Ask how they’re doing, what their concerns are, and how you can help them adapt.
• Be proactive. Offer solutions to stretch their dollars. Can you phase projects differently? Bundle services? Shift priorities?
• Strengthen contracts. If you have long-term agreements, make sure they’re still solid. Look for ways to extend them before your competitors do.

3. Pivot to Adjacent Markets

If one of your core sectors is slowing, where else can you apply your expertise?

• Look around. If a commercial development is stalling, is the education sector holding steady? Can you shift to infrastructure, health care, or government work?
• Geographic expansion. What other regions are on the upswing? Can you set up partnerships or hire talent in those areas? Can you convince a friendly client to take you there?
• Service expansion. What can you add to your offerings that aligns with your expertise? If you’re an architecture firm seeing a slowdown in multi-family, could you expand into repositioning/reuse projects?

Look at where your skill sets translate. Your firm might already have the expertise—you just need to reposition it.

4. Shore Up Your Business Development Game

When work is abundant, AE firms often neglect business development. But when things tighten, suddenly, everyone scrambles. Don’t be that firm.

• Re-evaluate your hit rate. Where are you winning and losing work? Adjust your approach accordingly.
• Be more aggressive. Ramp up client outreach. Stay visible. Attend industry events. Don’t be a stealth marketer. It doesn’t work.
• Invest in BD training. Many PMs don’t think of themselves as salespeople, but give them the tools to help sell your firm, and they’ll close more than you might think.

5. Optimize Operations Without Knee-Jerk Layoffs

Too many firms respond to slowdowns by slashing staff at the first sign of trouble. That’s short-sighted. Talent is hard to find and even harder to replace. Instead:

• Control costs wisely. Look at overhead, not just payroll. Travel, extravagant benefits, office expenses—where can you trim without gutting capabilities?
• Enhance productivity. Are there processes slowing your teams down? Can technology or better project management tools help?
• Reallocate staff. Move underutilized people to growth areas instead of cutting them outright.

If you must make cuts, be strategic. Protect your top talent (not necessarily the most senior staff) so you don’t eliminate your ability to rebound.

6. Get Financially Fit

When work is plentiful, it’s easy to overlook financial discipline. But when things get a little uncertain or slow, cash flow is your best friend.

• Strengthen your balance sheet. Pay down debt where possible. Build cash reserves.
• Tighten up AR. Clients may start stretching payments. Get ahead of it by reinforcing billing discipline.
• Diversify revenue streams. Recurring revenue models, small consulting engagements, or alternative fee structures can help keep cash flowing.

Financially fit firms that experience slowdowns in their target markets can still make moves.

7. Use the Time Wisely

If you do experience a slowdown in your sector, don’t just wait it out. Use the time productively.

• Invest in training. Develop your team so they’re ready to lead when things pick up again.
• Strengthen internal systems. Is your firm running as efficiently as it could? Now’s the time to fine-tune.
• Double down on culture. When firms go through dry patches, culture takes a hit if leadership isn’t intentional. Keep people engaged and motivated.

We all hope the good times keep on rolling. But crossing your fingers doesn’t count as risk management. Stay disciplined, stay proactive, and be ready if everything doesn’t continue to come up roses.

Contact Mark Goodale at 508.254.3914 or email [email protected].

Market Snapshot: Florida

50 states in 50 weeks – This series leverages our market intelligence database to bring you powerful AE industry insights. Each week, we highlight a new state in green while previously featured states fade to a lighter green. In anticipation of the Southeast M&A and Business Symposium happening in Miami this week, we are bringing you insights about Florida.

Florida Economic Performance and Outlook Grade*: A+

• Economy: A
• Population: A+
• Workforce: C-
• Financial/Fiscal Health: A-

* Overall grade is assigned based on a curve (relative to all states’ performances).

Florida’s architecture and engineering industry is driven by rapid population and economic growth. The state has the highest projected increase in construction starts for 2025, with robust demand for transportation, water management, and coastal resilience projects. Florida is also experiencing continued expansion in the aerospace, logistics, and technology industries, further fueling the need for industrial and commercial developments. Major ongoing initiatives include highway expansions, airport improvements, and climate adaptation projects aimed at mitigating the impact of hurricanes and rising sea levels. Opportunities in Florida are well spread out throughout the state, which has the highest number of metropolitan planning organizations (MPOs). The state’s tax-friendly business environment (ranked fourth) and high levels of in-migration continue to attract corporate relocations and real estate investment, supporting long-term demand for AE services. Regional highlights for Florida include:

• Miami: Urban redevelopment, high-rise residential construction, and coastal resilience projects
• Orlando: Theme park expansions, mixed-use developments, and transportation infrastructure investments
• Tampa Bay: Industrial and port-related construction tied to logistics and trade growth
• Jacksonville: Expanding defense and aerospace sectors driving infrastructure and industrial demand
• Fort Lauderdale: Significant airport and seaport expansion projects enhancing connectivity

For sector-specific data and insights for Florida or questions about our market intelligence and research services, call/text Rafael Barbosa at 972-266-4955 or email [email protected].

For a comprehensive outlook for 2025, you can access the 2025 AE Market Intelligence Webinar (recorded on January 28). Click here for details.

Weekly M&A Round Up

Another busy week for industry consolidation: With two new featured deals in Washington and Canada, industry M&A activity is now up 4% over the past 12 months. Last week, we reported additional domestic transactions in FL, MD, MA, CA, WV, and NV. Globally, six additional deals were announced in the UK, Canada, Denmark, Australia, and Spain. You can check all the week’s M&A news here.