Word on the Street: Issue 276

ZenaTech Receives the AE Industry’s 2026 Most Prolific and Proficient Acquirer Award

We’re delighted to announce that ZenaTech (Toronto, Canada) (Nasdaq: ZENA) (FSE: 49Q) (BMV: ZENA) is the recipient of this year’s Most Prolific and Proficient Acquirer Award. This is the first of the three Awards that will be announced in 2026 as part of our Excellence in Acquisitive Growth Awards Series.  

ZenaTech is a business technology solutions provider specializing in AI drone, Drone as a Service (DaaS), enterprise SaaS, and quantum computing solutions for commercial, government, and defense customers. Last year the firm made a remarkable 18 acquisitions.

Since 2017, the firm has leveraged its software development expertise and grown its drone design and manufacturing capabilities through ZenaDrone to innovate and improve processes including inspections, surveying, monitoring, safety, security, and compliance. 

With enterprise software customers using branded solutions in law enforcement, government, and industrial sectors, and drones being implemented in agriculture, defense, logistics, and construction sectors, ZenaTech’s portfolio of solutions help drive exceptional operational efficiencies, speed, precision, and data. 

The firm operates through offices in North America, Europe, Taiwan, and the UAE and is growing its DaaS business and global network of locations.

Last week, Morrissey Goodale Senior Consultant Katharine Van Leer caught up with Linda Montgomery, ZenaTech’s Vice President of Corporate Development, and Vijay Murari Somanchy, the firm’s Director of M&A, to discuss ZenaTech’s approach to acquisitions and their importance to the firm’s success. Here’s their conversation:

Congratulations on your continued growth and success. Can you explain ZenaTech’s vision and strategy for our readers?

ZenaTech’s strategy is to lead in AI-powered drone platforms and enterprise software solutions that modernize mission-critical operations across commercial, government, and defense sectors. The company focuses on building a scalable, recurring-revenue model through DaaS aided by strategic acquisitions in low-tech sectors ripe for drone innovation. Our subsidiary ZenaDrone specializes in drone design and vertically integrated, compliance-ready manufacturing. By combining autonomous drones, advanced analytics, cloud SaaS, and emerging technologies such as quantum computing, ZenaTech’s vision is to deliver intelligent, data-driven solutions that improve operational efficiency, safety, and decision-making—positioning the company as a differentiated leader in the next generation of aerial autonomy platforms.

How important have acquisitions been to that success? Do you target a certain balance between acquisitive and organic growth? Do you view one type of growth as “better” than the other?

Acquisitions have been a strategic accelerator for ZenaTech, enabling us to rapidly expand our DaaS footprint. We’ve entered new geographic markets across the U.S. and in the UK and Canada, we’ve added specialized capabilities for our drone integrations into land surveys, powerline inspections, cell tower maintenance, and power washing areas, and strengthened our recurring revenue. Rather than viewing acquisitions and organic growth as competing strategies, we see them as complementary. Acquisitions provide speed, market access, talent, and operational scale, while organic growth drives integration, technology innovation, customer expansion, and margin improvement across our platform. While still only one year into our acquisition strategy, the company aims to have a disciplined balance—using acquisitions to build customer density and capability within our DaaS network and leveraging our integrated AI drone and software platforms and centralized data processing infrastructure to unlock long-term organic growth. Neither approach is inherently “better”; together they form a capital-efficient strategy we are leveraging designed to accelerate scale, increase enterprise value, and reinforce our unique competitive position.

Closing 18 acquisitions last year was a remarkable achievement. In your experience, what’s the lifecycle of an acquisition—from the time you initially connect with a firm’s leadership to the closing of a transaction? How many firms at any given time are in your “pipeline”?

The life cycle of a transaction varies. So far, we have mostly acquired entrepreneurial private firms, and for them this is an emotional decision. Often their information is not highly organized or well put together, so it may take more time than anticipated. The pace is also mandated by the seller motivation (some sellers want time to “feel” the market while others are anxious to sell) or their broker/advisor’s M&A experience. The timeline also varies by size and complexity. We strive to reduce timelines by making the seller comfortable—we introduce them to some of the past sellers who currently operate under our ownership or have them interact with other members of the ZenaTech team. The goal is to achieve a seamless M&A process. 

We have a number of opportunities in our pipeline at any given time, and we are having several conversations with sellers across various stages. These include broader conversations at initial outreach stages, initial conversations with or without an NDA, preliminary due diligence, LOI negotiation, and ongoing live mandate stage conversations on the road to a closing.

Let’s talk integration. I know every CEO who is reading this and considering selling their firm is asking themselves, “What is life like after the deal for myself, my employees, and my clients?” Can you share some insights as to what integration looks like for the firms that you acquire? Is it a one-size-fits-all approach? How do you define success in this regard?

As we know, M&A strategies are most likely to fail due to a lack of communication or strategy notes exchange between the M&A execution and the internal integration teams, so our M&A team strives to be involved in facilitating integration and post-acquisition operations. 

We typically like to have general Day 0, Day 15, Day 30, and Day 100 plans crafted and managed by our integration teams across our internal functions such as HR, accounting, payroll, AR/AP, vendor management, capital asset management, business development, marketing, sales, and IT.

Our approach has been to retain all target company employees and their customers. We deeply care about the target company culture, team chemistry, and their fit with our broader portfolio of companies and colleagues.

Our goal is to carry forward the legacy of the acquired company, which tends to be an owner/operator with 20 years of operations and customer relationships. We deploy innovative drone technology across the companies, drone pilot training, standardized workflows, and centralized data operations. 

The goal is to reduce noise and distraction at the revenue generation level and free up some bandwidth for key people to have them solely focus on revenue generation and production. 

Can you talk about the corporate development team at ZenaTech that works to make your acquisitions happen? What are the key functions within the team, and how do they work together? How do they work with the firm’s line management and technical functions?

The M&A team sits within the corporate development team at ZenaTech and is responsible for executing our acquisitions. This includes the entire M&A cycle, end to end—from  target identification, preliminary due diligence, negotiations, structuring, execution and maintaining relationships with brokers/advisors, sellers, attorneys, etc. Our CEO and CFO are also in fairly constant communication with our teams. 

And then, post-acquisition, M&A along with our operations teams are engaged in tracking of key KPIs and performance analysis, including implementation of training and technology such as drones, scanners, LiDAR processes, etc.

ZenaTech is big on culture, and this translates strongly to the M&A team. Cross-functional collaboration, clear communication, targeted tasks delegation, and crafting detailed integration plans are some of our working principles we are executing every day and continually trying to improve. 

2025 was a remarkably busy year for ZenaTech in terms of acquisitive growth. How is 2026 shaping up? Do you have any specific types of firms or geographies that you will be prioritizing?

We intend to continue to build on the momentum we have created in 2025, which included expanding and diversifying our DaaS model across industry verticals and geographies. We have demonstrated our ability to acquire companies, and we continue to implement our drone technology and focus on integration, margin expansion, and revenue. 

In our research for the Excellence in Acquisitive Growth Awards Series, we found that skilled acquirers in the industry can create some impressive business results through their acquisitions. How do you look to improve the performance of the firms that you acquire? What else do you measure and track to measure success? 

Our DaaS model is designed to improve the performance of acquired firms by innovating legacy processes like land surveying, incorporating the speed, precision, and automation benefits of drones. Our plan is to standardize their operations and layer in higher-margin software and AI capabilities. Post-acquisition, we integrate companies with centralized platforms—streamlining data analysis and workflows, pilot training, and maintenance—while introducing subscription-based service contracts and AI-driven analytics. We want to shift the acquired businesses from project-based revenue toward recurring, scalable, and higher-visibility revenue streams. We look to cross-selling across our broader DaaS network, centralized back-office efficiencies, and shared technology infrastructure further expand margins and operating leverage.

What do the next five years of growth look like for ZenaTech? 

Over the next five years, we plan to further solidify our role as a differentiated technology and drone industry leader in data-driven aerial intelligence platforms, leveraging our drones, autonomy, AI, and enterprise software to drive long-term, sustainable growth and value.

The AE industry’s Most Prolific and Proficient Acquirer Award will be presented to the ZenaTech team at the Southeast M&A and Business Symposium in Miami this March.  

To connect with Katharine Van Leer, email her at [email protected].  

What AE Firm Leaders Should Do With Their Mistakes

Working on the business is much different than working in it.

In the work AE firms do, you are paid to get it right. Bridges don’t get “close enough,” ICU’s aren’t expected to open with flaws that will be fixed later, and water treatment plants don’t slowly improve over time through beta testing. The expectation (and rightly so) is precision. Lives and livelihoods depend on it.

But when you step out of a project role and into a leadership role, it’s a different ballgame. Whether you are building a leadership bench, restructuring a P&L model, entering a new market, investing in technology, or adjusting your capital strategy, you’re not following a formula or solving a math problem. You are making informed bets in an uncertain system populated by a bunch of human beings, and everything that comes with that term.

Nobody bats 1.000 in that world. It’s trial and error. But getting things wrong is the way you get them right.

So, the question is not whether you will make mistakes while working on the business. You will. The real question is what to do with them.

Below are four common leadership mistakes AE firm leaders tend to make and two very different ways to respond to each. One path exacerbates the mistake, and the other turns it into an asset.

MISTAKE #1: THE PROMOTION THAT DOESN’T WORK

You promote a strong project manager into a business unit leader role. She is technically excellent, loved by clients, and runs profitable jobs. The move seems obvious to everyone.

But six months later, the wheels are coming off the wagon. She avoids hard conversations, struggles to hold others accountable, and is overwhelmed by staffing decisions and uncomfortable with business development. Some of her former peers who now report to her are unsure how to respond to her authority while others simply don’t.

You made the wrong call.

The Unproductive Response

You minimize it. You tell yourself first, then everyone else, “She just needs more time.”

Then you start chipping away at her by privately taking decisions back from her, sitting in on client meetings for “support,” and rerouting tough HR challenges. And all this time, you never clearly redefine the role or address the issue.

The team loses confidence, she burns out, and you leave her in the role longer than you should because you don’t want to seem unsteady at the helm.

What does the organization learn? Mistakes are buried (and therefore not OK to make), stepping up is risky, and fixing the obvious isn’t the way your company does things.

As far as the most effective ways to demotivate good people, it ranks right up there with the best of them.

The Productive Response

You name it clearly and early. Not publicly or dramatically, but directly. You sit down and say, “This role is different from running projects. It requires people leadership and business judgment that we haven’t fully developed yet. That’s on me as much as you. Let’s decide together whether we invest in building those muscles or whether your greatest value is in a different seat.”

If she has the appetite and aptitude, you give her structured leadership development, clear expectations, and defined support. If she does not, you reposition her in a role where she thrives and explain it as a strategic alignment decision, not a demotion.

What does the organization learn? That leadership roles require different skills, development in your organization is real, it’s OK to experiment, and struggling does not result in exile.

The mistake now becomes part of building a leadership system instead of a leadership charade.

MISTAKE #2: THE BIG TECHNOLOGY BET THAT UNDERPERFORMS

You invest heavily in a new ERP platform or project management system. It promises better forecasting, real-time data, and improved margin visibility. The implementation costs more than expected, adoption is all over the place, and project managers keep using spreadsheets on the side.

A year and a half later, the return on investment is questionable at best.

The Unproductive Response

You double down defensively. You blame “resistant PMs,” and issue one-time, terse memos mandating usage. All the while, you avoid acknowledging that the rollout was rushed or that the configuration didn’t reflect how your firm actually operates. Or worse yet, you stop talking about it and let it drift into no man’s land.

What does the firm learn? Once again, leadership doesn’t admit missteps, systems are imposed from above, and compliance matters more than improved performance.

Congratulations. You now have both a capital problem and a credibility problem.

The Productive Response

You treat it like a post-project debrief (because it is one). You gather the right people and ask three disciplined questions:

1. What did we expect this system to change?
2. What is it actually changing?
3. Where did we misjudge readiness, process, or behavior?

You may conclude that the software was fine but change management was weak. Or maybe you come to the realization that you overestimated your firm’s data discipline. Or perhaps you accept that the system was configured to support accounting, not operations.

In any case, you then make a visible course correction. You reassign ownership of the system to operators, not just finance or IT, narrow the scope and reset expectations, and simplify the rollout.

The key is to separate ego from outcome. If you can do that, the organization sees leadership learning in real time, the system improves, and your credibility goes up—not down.

MISTAKE #3: THE GEOGRAPHIC EXPANSION THAT STALLS

Your strategic plan calls for geographic growth. You select a region that looks strong on paper, open a small office in a high-growth metro, and hire a respected local leader.

But three years later, revenue is flat, cultural integration is weak, and the office operates like a distant satellite.

The pro forma you envisioned simply didn’t materialize.

The Unproductive Response

You quietly starve it. You cut marketing support, avoid talking about it at leadership meetings, and blame local conditions for the lack of performance. You keep it open because closing it is somehow harder to you than throwing good money after bad. Meanwhile, capital and leadership attention are tied up in a ship that’s headed for the rocks.

The firm learns that strategic decisions are irreversible and that you cling to sunk costs.

The Productive Response

You assess it with discipline, asking:

• Is the strategy wrong, or is execution weak?
• Did we underestimate brand recognition challenges?
• Did we expect the local leader to carry too much alone?
• Does this market require buy instead of a build?

Then you choose to double down with defined additional investment and measurable expectations, redesign the model, or cut your ties and explain why.

If it comes down to it, closing a struggling office is not a strategic failure if it improves future decision-making. In fact, a decisive, thoughtful exit will be much more respected than letting the operation flounder year after year.

MISTAKE #4: THE CAPITAL ALLOCATION SWING AND MISS

Flush with cash and a strong backlog, you decide to reinvest aggressively, hiring ahead of demand, making a niche acquisition, and growing the overhead structure to support further expansion.

But then the market softens, utilization drops through the floor, overhead is burdensome, and cash is tight.

You misjudged timing.

The Unproductive Response

You swing hard in the opposite direction with an immediate hiring freeze, deep marketing and training budget cuts, and travel bans. You follow up with a frantic firmwide message about belt-tightening.

The organization now needs a neck collar after the whiplash you just put it through. Confidence drops and suddenly the long-term strategy that was boasted about feels fragile.

The Productive Response

You separate the timing error from the strategic intent and reflect. Maybe the acquisition still makes sense long-term, and maybe the talent you hired is still essential to achieving the firm’s vision.

Instead of reacting emotionally, you:

• Adjust pacing rather than abandoning direction
• Revisit working capital policies
• Improve forecasting discipline
• Tighten management of performance without hitting the panic button

And you communicate clearly that while you know you didn’t get the timing just right, you still believe in the long-term direction—but you need to manage cash and capacity more tightly for the next 6 to 12 months.

The firm now sees that your leadership is steady, even if you always don’t get everything right.

The real risk isn’t the mistake. In each of the examples we just went through, the initial error is rarely fatal. Promotions can be adjusted, systems can be reconfigured, offices can close, and capital plans can be reworked.

The real danger is cultural. If you treat mistakes as personal embarrassments, your firm becomes cautious and political, and people stop taking initiative. But if you treat mistakes as opportunities to improve, the firm spirals up instead of down.

So, set your expectations, conduct controlled experiments to see what works and what doesn’t, and learn your way toward your goals.

Market Snapshot: Engineering & Construction Stocks

Weekly market intelligence for AE and environmental industry leaders.

The engineering and construction (E&C) industry, as defined by Standard & Poor’s (S&P), is one of 22 industries classified under the “Industrials” sector. The E&C index is composed of 59 companies, over 551,000 employees, and a $439 billion market capitalization (almost 6% of the total sector).

The index has delivered robust returns in recent years. Year-to-date (YTD) return is approximately 23%. Over a three-year horizon, the index has shown tremendous growth, with a 224% return compared to 69% by the S&P500.

Strong performers such as Quanta (Houston, TX) (NYSE: PWR) (31% YTD return) and Comfort Systems USA (Houston, TX) (NYSE: FIX) (57% YTD return) have benefited from infrastructure spending and renewable and grid investments.

For more insights on AE markets or questions about our market intelligence and research services, contact Rafael Barbosa.

Join us tomorrow (February 24) for the 2026 AE Industry Outlook Webinar where we’ll unpack the trends shaping the industry and provide a sharp view of market opportunities. Click here for registration and details.

Weekly M&A Round Up

Another busy week for domestic and global M&A activity: Last week saw strong M&A activity with a total of 23 new transactions. Seventeen domestic deals were announced in ME, PA, CA, TX, MN, VA, MT, DE, NJ, MI, and ID. Domestic M&A activity is up 1% over the past 12 months. Overseas, we reported deals in Australia, the UK, and Ireland. Check out all of the week’s M&A news here.