Word on the Street: Issue 263

Deep in the Heart of Texas

That’s where we hosted almost 200 AE industry executives, investors, and experts for our 12^th(!!) Texas and the South M&A and Business Symposium. (That is, of course, if you consider the stunning Post Oak Hotel at Uptown Houston to be in the heart of Texas. I’ll take any opportunity to fire up that Gene Autry classic.)

The attendees took advantage of the Post Oak’s many top-notch restaurants and its ample boardrooms, libraries, and lounges to connect at pre-scheduled, CEO-only networking dinners, mingle with peers at receptions with seemingly limitless hors d’oeuvres, and convene impromptu private meetings behind closed doors to kick off or advance merger discussions that could lead to the creation of the next great AE industry firm.

When the attendees were not networking or meeting, they took in the Wednesday and Thursday sessions designed to bring them up to speed on industry trends and best practices. Here are the reports of those sessions from our team on the ground, starting with Wednesday.

1. Q4 State of the Industry: (Nick Belitz, Managing Principal, Denver) Megan Miller of Deltek and I collaborated to share the latest industry financial performance metrics and forecasts. Referencing the data from the 46^th annual Deltek Clarity Architecture and Engineering (A&E) Industry Study of over 650 AE firms, Morrissey Goodale databases, and symposium attendees, the data revealed strong recent results tempered with concerns about the near-term future. While industry revenue continues to grow, operating profits have softened somewhat. Backlogs and balance sheets are as strong as ever. One in five symposium attendees noted that uncertainty in the broader economy and delays created by the actions of governments at multiple levels were weighing heavily on their decision-making. Overall, while the horizontal/public infrastructure markets offer the most perceived opportunities for the industry, tremendous investment in mission-critical facilities, data centers, and the power systems to support them will also drive growth in 2026.

2. The Future of the AE industry CEO Panel: (Mick Morrissey, Managing Principal, Boston) We typically like to kick this panel off with some “ice-breaker” questions so that the audience can quickly build a “personal” connection with the CEO panelists. The (100% hilarious) responses to those questions from Chad Brown, CEO of Thompson Holdings (Mobile, AL) (ENR #129); LaShae Baskin, CEO of MOREGroup (Fort Worth, TX) (ENR #108); Carrie Stokes, CEO of Barge Design Solutions (Nashville, TN) (ENR #160); and Javier Baldor, CEO of BST Global, set the stage for a remarkably engaging, thoughtful, and wide-ranging conversation co-moderated by Karen Erger of Lockton and myself. This is how my business partner David Thornhill, Vice President, described it on LinkedIn: “Policy, Regulation, and Market Outlook was the initial prompt, but it didn’t take long at all to evolve into a conversation about people. The CEOs on stage agreed on one thing: The firms that will win the next decade are the ones that build cultures safe for change—where curiosity, cross-training, and “healthy friction” aren’t slogans, they’re systems. A few truths that landed hard: (1) If your culture is being led only by the C-suite, you’re doing it wrong, (2) Fix things during the good times—that’s when you can afford to, (3) Leadership development always pays for itself, (4) Your best teams make it hard to tell who the leader is, and (5) AI will remove the “mundane” from your people so that they can focus on “excellence.” Yes, AI and data are reshaping our industry. But the foundation of the firm of the future will still be human: Keywords continue to be connection, learning, and trust. So, play the long game. Invest in your people. Because tailwinds don’t move a firm that isn’t ready to fly.” My personal favorite quote from the panel: “Create an empowerment matrix, not a responsibility matrix.”

3. The 2025 Best Post-Transaction Performance Awards: (David Thornhill, Vice President, New York, and Sarah Thornhill, Consultant, Denver) We had the privilege of presenting this year’s Excellence in Acquisitive Growth Awards for Best Post-Transaction Performance. These Awards recognize those firms that have delivered superior meaningful, measurable, and lasting positive business impacts for the companies they’ve acquired—proving that great M&A isn’t just about growth, but about what you grow into. This year’s recipients are True Environmental (New York, NY) (ENR #219) for its 2024 acquisition of Sundance Consulting; Atwell (Southfield, MI) (ENR #70) for its 2021 acquisition of Waldrop Engineering; and UES (Orlando, FL) (ENR #40) for its 2021 acquisition of Alpha Testing. These three industry leaders didn’t just close deals, they turned them into catalysts for growth. Each delivered on their promises to create greater value, elevate client service, and expand opportunities for their people. Because in this business, the ink drying isn’t the end of the story—it’s the moment the real history begins.

2025 Best Post-Transaction Performance Award Recipients
From left to right: David Thornhill, VP; Jim Stamatis, CEO, True Environmental; David Richter, Executive VP and Chief Growth Officer, Atwell; Manuel Hurtado, VP Corporate Development and M&A, UES; Sarah Thornhill, Consultant

4. AE and Environmental Consulting Industry M&A Trends and Valuations: (Jon Escobar, Principal, Chicago, and Nick Belitz, Managing Principal, Denver) Despite the noise and uncertainty in the wider world and news media, buyers and sellers in the AE industry have pushed forward with their deal-making, reflecting long-term confidence in the days ahead. Given year-to-date activity, we expect 2025 to end up on par with 2024 in terms of the number of industry transactions. And with almost 260 private equity platforms at work nationally and overseas, we can expect a sustained level of transactions to continue. Critically, while valuations overall are holding near all-time highs, the deals at the very top end of the scale are seeing some downward pressure on prices, likely a reflection of greater market uncertainty and higher debt costs over the last year for the very largest industry transactions. Nonetheless, we still expect robust deal activity for the foreseeable future.

5. The 1000 Club: (Brendon Cussio, Principal, Denver) Sarah Thornhill hosted the 1000 Club panel consisting of George Christodoulo of Lawson & Weitzen, David Sullivan with PKF O’Connor Davies, Dale Crow with Risk Strategies, and myself. The discussion took attendees through the deal from pre-market through closing, covering recent trends in deal-making and key aspects for both buyers and sellers to consider during the process.

6. Delivered Sweetly but Not Sugarcoated: (Nick Belitz, Managing Principal, Denver, and David Thornhill, Vice President, New York) Dr. Ray Perryman (“The Most Quoted Man in Texas”) kicked off Thursday and offered a clear, candid look at the economy across Texas, the South, and beyond. Tariffs, labor, and AI all point to tight supply and the need to adapt faster than technology. Bond markets remind us that when lenders get cautious, it’s worth listening. “We innovate and deliver the next big thing—but we don’t retrain our workforce when skills become obsolete.” That line lingers and is a challenge and a charge for everyone shaping the built environment.

7.  “Slow Is Smooth, and Smooth Is Fast” Integration Best Practices: (Sarah Thornhill, Consultant, Denver, and David Thornhill, Vice President, New York) We had a lively audience peppering panelists Alison Ritterbusch, Director of Integration, Trinity Consultants (Dallas, TX) (2024 Excellence in Acquisitive Growth Award Recipient), and Sandy Matthews, PE, Vice President, Director of Integration, Salas O’Brien (Irvine, CA) (ENR #31) (2023 Excellence in Acquisitive Growth Award Recipient), with questions about integration best practices. The conversation ranged from tactical checklists to big-picture value creation and how to communicate with new team members. Their parting wisdom—Alison said, “Flexibility, flexibility, flexibility,” and Sandy said to take a note from the Navy SEALs, “Slow is smooth, and smooth is fast.”

8. Investing in the Industry—Capital Follows Clarity: (Jon Escobar, Principal, Chicago) In Thursday’s session on private equity in the AE industry, active industry investors Erik Gernant, Principal at Keystone Capital, and Norm Scherr, Partner at Providus Capital Partners, shared what today’s investors are really looking for. With nearly 200 sponsor-backed platforms and private equity driving close to half of all industry transactions, strong performance is no longer the differentiator. Capital flows to leadership teams with a clear vision, a credible strategy, and the ability to align people around where the industry is going and their firm’s place in it. 

9. The Industry’s Top Firms Share Their Market Outlooks and M&A Best Practices: (Matthias David, Consultant, Chicago) For this panel discussion I was joined by Jeremy Boswell, Chief Development Officer at STV (New York, NY) (ENR #34); Russell Iorio, Managing Director & Corporate Development at Trinity Consultants (Dallas, TX) (2024 Excellence in Acquisitive Growth Award Recipient); and Carl Shaw, Executive Vice President at LJA Engineering (Houston, TX) (ENR #52), one of our “10 Movers and Shakers to Watch in 2025.” They shared valuable perspectives on the current M&A landscape, highlighting the traits they prioritize in potential sellers and the strategic approaches that drive scalable growth. The key takeaway is clear: A well-defined strategy, awareness of your unique selling points, and a strong cultural alignment are the foundations of long-term success.

10.  What a Successful Sale Looks Like: (Nate Wentworth, Vice President, Denver) Brandon Claborn, Vice President of Environmental at WSB (Minneapolis, MN) (ENR #109), and Sanjay Agrawal, CEO of AG&E (Dallas, TX)—both of whom recently successfully sold or recapitalized their respective firms—joined me to share their candid insights on the emotional and strategic journey of selling their businesses. They discussed the entire process, from the initial decision to seek a partner to due diligence and integration. Both emphasized the various catalysts that led them to find a partner and highlighted the importance of cultural fit and growth opportunities for their respective companies and staff as critical to the success of any transaction.

Thank You to Our Sponsors, Partners, and Exhibitors! Once again, 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 (a) are 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 Deltek, Lockton, Risk Strategies, BST Global, CTA, Egnyte, SPRX, Full Sail Partners, Plante Moran, Lawson & Weitzen, PKF O’Connor Davies, Morningstar Law Group, ACEC Retirement Trust, aktion associates, joist.ai, and Quire.

We’ll be hosting the 2026 Southeast M&A and Business Symposium in March at the Ritz-Carlton South Beach in Miami. You can stay abreast of updates to the agenda and speakers here. We hope to see you there!

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