The good times in the engineering industry keep on rolling, with 2024 on track to be another stellar year of revenue growth and profitability. Engineering firms continue to prosper from unprecedented demand for their services, substantial public sector and institutional funding, and sustained interest from public equity. Fueled by robust backlogs and balance sheets, engineering firms are investing in both organic and acquisitive growth initiatives.
Since the start of 2021, the A/E and environmental industry has experienced a record level of consolidation—with more than a merger a day. And there’s no sign of a slowdown. Morrissey Goodale tracked 204 transactions of U.S. design and environmental firms through the end of May. If trends hold, this tally will be a new all-time deal-making record.
Based on Morrissey Goodale’s analysis of deals completed in the second quarter of 2024, the size of buyers and sellers continues to increase. For as long as we have been keeping records, the median acquirer size has never exceeded $98 million in gross revenue, and the median seller size has consistently ranged between $2.5 million and $3.5 million. Over the first five months of 2024, however, the revenue of the median size acquirer ballooned to $147 million, while the median seller size jumped to $4.25 million.
The first change is easier to explain: Bigger buyers are getting more active. It’s harder to say, though, why the seller size has increased. One theory is that buyers are reallocating their limited M&A deal-making resources to execute relatively more, larger “needle-moving” deals. Another theory is that private equity firms, which make heavy use of debt, have been increasingly active and targeting larger sellers since those acquisitions are not heavily dependent on hard-earned equity to finance. Whatever the reason, it’s bad news for smaller firms that have been shut out of deal-making.
Reflecting on the recent supersizing of transactions, 19 Engineering News-Record (ENR) 500 design firms were either sold or recapitalized in the first eight months of the year, including the third-quarter announcements of WSP (Montreal) (ENR #5) entering into an agreement to acquire POWER Engineers (Hailey, Idaho) (ENR #26), as well as Gannett Fleming’s (Camp Hill, Pa.) (ENR #29) strategic merger with TranSystems (Kansas City, Mo.) (ENR #58). Second-quarter acquisitions included AKF Group (New York City) (ENR #318) by WSP (Montreal) (ENR #5), CT Consultants (Mentor, Ohio) (ENR #339) by Verdantas (Tampa, Fla.) (ENR #113), and P2S (Long Beach, Calif.) (ENR #308) by Legence (San Jose, Calif.). In comparison, we reported 16 firm sales or recapitalizations among the ENR 500 in all of 2023.
Employee-owned buyers accounted for just over half (106) of the deals completed through the first five months of 2024, while just 8 percent of transactions (16) over the same time period featured publicly traded buyers. Another 40 percent of deals (82) were either purchases by private equity-backed operating firms or recapitalizations by private equity groups, which continues a trend that Morrissey Goodale has been monitoring since 2018, particularly among top engineering firms. In the second quarter of 2024, ACEC member firm Infrastructure Consulting & Engineering (West Columbia, S.C.) (ENR #205) received a strategic investment from private equity firm Godspeed Capital Management (Washington, D.C.), while Sterling Investment Partners (Westport, Conn.) purchased a majority stake in Verdantas from Round Table Capital Partners (Miami).
Member firms that made multiple acquisitions in the second quarter of 2024 included Verdantas, NV5 (Hollywood, Fla.) (ENR #24), LJA Engineering (Houston) (ENR #67), and Bowman Consulting Group (Reston, Va.) (ENR #78), recipient of Morrissey Goodale’s 2024 Most Proficient and Prolific Acquirer Award.
Sun Belt firms continue to be the most attractive M&A targets for buyers. Acquisitions in California (24), Florida (23), and Texas (19) accounted for nearly one-third of all A/E and environmental industry deals in the first five months of 2024.
Overseas acquirers are still showing interest in the U.S. market, yet they represent just a fraction of buyers. Only 5 percent of transactions in the first five months of the year involved a foreign buyer. Although that figure is up from 3 percent in 2023, the last time overseas acquirers played a significant role in U.S. industry consolidation was back in 2017, when they accounted for 10 percent of deals. While we see an increasing number of international firms looking to do deals in the U.S., overseas buyers have struggled to make inroads in a highly active marketplace already stacked with better-known, homegrown acquirers.
The second half of 2024 promises to be a busy one for serious buyers and investors and motivated sellers as high M&A activity and elevated valuations are expected to persist. With the engineering industry showing all indications of reaching new “peak consolidation” territory, many firm owners and leaders have decided there has never been a better time to sell their firms.
Following is a list of recent transactions, with ACEC members highlighted in bold.
Technology, conformity assessment, and consulting solutions firm NV5 (Hollywood, Fla.) (ENR #24), acquired myBIMteam (Winter Haven, Fla.), a firm that offers building information modeling, reality capture, and digital twin solutions.
Architecture; civil engineering; surveying; structural; and mechanical, electrical, and plumbing (MEP) firm Thompson & Litton (Wise, Va.) acquired Tysinger, Hampton & Partners (Johnson City, Tenn.), a civil engineering and surveying services firm.
GAI Consultants (Homestead, Pa.) (ENR #166), an engineering, planning, and environmental consulting firm, acquired Creighton Manning Engineering (Albany, N.Y.), an engineering firm focused on the transportation and transit markets.
To view the most up-to-date and “live” versions of the M&A heat maps, and to see who are the buyers and sellers in each state, go to www.morrisseygoodale.com.
Nick Belitz is a principal with Morrissey Goodale LLC, a specialized, full-service management consulting and research services firm that offers strategic business planning, leadership training and development, mergers and acquisitions advisory, valuation and ownership transition, market research, and marketing and business development consulting services. He can be reached at nbelitz@morrisseygoodale.com.
Engineering, environmental, landscape architecture, and planning firm Barton & Loguidice (Liverpool, N.Y.) (ENR #286) acquired Penn Central Engineering (Centre Hall, Pa.), a structural engineering and project management firm serving commercial, institutional, and industrial clients.
Multidisciplinary engineering and construction management firm BM&K Engineering (Braselton, Ga.) joined LJA Engineering (Houston) (ENR #67), a multidisciplinary engineering consulting firm.
McPherson Consulting (Virginia Beach, Va.), an engineering firm that offers traffic engineering and transportation planning services, was acquired by VHB (Watertown, Mass.) (ENR #62).
A/E firm STV (New York City) (ENR #35) acquired MEHTA and Associates (Winter Park, Fla.), an engineering and construction engineering inspection firm specializing in civil works and transportation infrastructure projects.
Round Table Capital Partners (Miami) sold a majority stake in its portfolio company Verdantas (Tampa, Fla.) (ENR #113) to Sterling Investment Partners (Westport, Conn.).
A/E, environmental, and planning firm LaBella Associates (Rochester, N.Y.) (ENR #127) acquired MEP firm ENGR3 (Alpharetta, Ga.). ENGR3’s expertise includes multifamily, mixed-use, and commercial development projects.
Traffic & Mobility Consultants (Orlando, Fla.), a transportation planning and traffic engineering firm serving commercial, residential, and municipal clients, acquired Lincks & Associates (Tampa, Fla.), a transportation and traffic engineering services firm.
Geoscience, engineering, and technology firm RESPEC (Rapid City, S.D.) acquired Enviromin (Bozeman, Mont.), an environmental geochemistry and microbiology firm.
Public infrastructure firm CRIADO & Associates (Dallas) joined powerhouse Dunaway (Fort Worth, Texas), a civil engineering, structural, landscape architecture, surveying, and construction inspection services firm.
Clark Dietz (Champaign, Ill.), a multidisciplinary engineering firm, acquired RS Engineering (Lansing, Mich.), a civil, structural, traffic, and construction engineering firm.
Planning and design consulting firm Kimley-Horn (Raleigh, N.C.) (ENR #10) joined forces with VICUS (Los Angeles), a consulting firm specializing in urban planning, design, and environmental services.
Rushing (Seattle), an MEP, fire protection engineering, lighting design, energy services, and commissioning firm, joined industry leader IMEG Corp. (Rock Island, Ill.) (ENR #57).
WSP (Montreal) (ENR #5) acquired AKF Group (New York City) (ENR #318), a specialized MEP firm that designs complex health care, science and technology, and mission-critical facilities.
Structural engineering firm Linton Engineering (Potomac Falls, Va.) merged with Bennett & Pless (Atlanta). The acquisition extends Bennett & Pless’ reach and single-discipline structural engineering expertise into the greater Washington, D.C., metro area.
Magnolia River Services (Decatur, Ala.), a utility and field services firm with expertise in engineering, inspection, geographic information system (GIS), and software, acquired Heath and Associates (Shelby, N.C.), an engineering and management consulting firm focused on the power and energy industry.
Crafton Tull (Rogers, Ark.) (ENR #412), a civil engineering, surveying, architecture, landscape architecture, and planning services firm, expanded its landscape architecture team with the addition of Prism Design Studio (Huntsville, Ark.).
Delta (Lubbock, Texas), a surveying and engineering firm with experience in commercial and residential projects, joined land development and employee-owned firm LJA Engineering (Houston) (ENR #67).
PEA Group (Auburn Hills, Mich.), a site design firm specializing in civil engineering, ecological consulting, geotechnical engineering, land surveying, landscape architecture, and facility consulting, acquired environmental firm ASTI Environmental (Brighton, Mich.).
Infrastructure Consulting & Engineering (West Columbia, S.C.) (ENR #205), the transportation-focused engineering and consulting services platform of Godspeed Capital (Washington, D.C.), acquired IDCUS (Houston), a civil engineering firm specializing in public infrastructure and transportation services.
Industrial Ally (Chesterfield, Mo.), a firm that provides mechanical, electrical, process, controls, and structural expertise for manufacturers of cement, lime, and other building materials, joined facilities planning and design firm Salas O’Brien (Irvine, Calif.) (ENR #39).
Civil, structural, geospatial, safety, and environmental firm LJB (Miamisburg, Ohio) (ENR #350) acquired Gorrill Palmer (South Portland, Maine), a land development, transportation, and municipal engineering firm.
GradyMinor (Bonita Springs, Fla.), a civil, land development, and municipal engineering consulting services firm, joined Pape-Dawson Engineers (San Antonio) (ENR #112), a civil engineering, environmental, and surveying services firm.
Bowman Consulting Group (Reston, Va.) (ENR #78) acquired Moore Consulting Engineers (Shamong, N.J.), an MEP and fire protection engineering firm.
Fast-growing Verdantas (Dublin, Ohio) (ENR #149) acquired Project Navigator (Tustin, Calif.), a firm that offers management and project coordination services, especially at federal (Comprehensive Environmental Response, Compensation, and Liability Act) and state superfund sites.
Legence (San Jose, Calif.), a firm that offers energy efficiency and sustainability solutions for the built environment, acquired P2S (Long Beach, Calif.) (ENR #308), an engineering, commissioning, and construction management firm serving the higher education, federal and municipal institution, health care facility, and data center sectors.
Transportation consulting firm TranSystems (Kansas City, Mo.) (ENR #65) acquired NCM Engineering (Rancho Santa Margarita, Calif.), a planning and design services firm specializing in transportation infrastructure improvement projects.
Verdantas (Dublin, Ohio) (ENR #113) acquired CT Consultants (Mentor, Ohio) (ENR #339), an A/E and environmental firm with experience in the government, water, and transportation markets.
Technology, conformity assessment, and consulting solutions firm NV5 (Hollywood, Fla.) (ENR #24), reached an agreement to acquire GIS Solutions (Springfield, Ill.), a firm that provides GIS application development, cloud-based database design, data science, and project management services.
Fast-growing firm Bowman Consulting Group (Reston, Va.) (ENR #78), entered into a definitive agreement to acquire Surdex Corporation (Chesterfield, Mo.), a geospatial and engineering firm that offers lidar, intelligent digital mapping, 3D hydrography, and disaster mapping.
Transportation consulting and engineering firm Infrastructure Consulting & Engineering (West Columbia, S.C.) (ENR #198) received a strategic investment from private equity firm Godspeed Capital Management (Washington, D.C.).
Structural engineering firm Structura (North Bethesda, Md.) acquired Fitzpatrick Engineering Group (Charlotte, N.C.), a structural engineering firm specializing in the health care, commercial, and industrial sectors.
Ulteig (Fargo, N.D.) (ENR #123), an engineering firm focused on the power, renewables, transportation, and water sectors, acquired Affinity Energy (Charlotte, N.C.), a control systems integrator with expertise in customized solutions for power and energy controls and instrumentation.
Donald F. Dickerson Associates (Tarzana, Calif.), an MEP, life safety, and fire protection services firm, executed a letter of intent to join multidisciplinary engineering firm Coffman Engineers (Seattle) (ENR #161).
Architecture, engineering, design, environmental, and surveying consulting firm PS&S (Warren, N.J.) (ENR #359) acquired Stout & Caldwell (Cinnaminson, N.J.), a civil engineering, environmental, and land surveying services firm.
Employee-owned and multidisciplinary engineering firm Halff Associates (Richardson, Texas) (ENR #85) acquired Singhofen & Associates (Orlando, Fla.), a water resources and civil engineering firm with expertise in water resources, design, and flood modeling services.
