Engineering Inc. - May/June 2015 - (Page 64)

Mergers and Acquisitions BY N E I L C H U R M A N How Engineering Firm Divestitures Can Be a Win-Win M ost of the conversation about mergers and acquisitions (M&A) activity in the engineering industry focuses on one firm being bought by another. A much less common approach is a divestiture where one firm sells a portion of its business (usually an office, a division, a subsidiary, or a business unit) to another. This is sometimes referred to as a "carve out," as the operation needs to be disconnected from the original owner and then "plugged in" to the buyer's operations. So far in 2015, we've seen quite a few strategic divestitures among industry firms. The key to making a divestiture successful is finding the right home for the part of the business being sold. Firms often discover that certain business segments are no longer aligned with their future goals and objectives. Yet, these segments can often be more effectively leveraged by another firm, where they fit squarely within a different long-term strategy. The recent transaction where 2015 REPORTED M&A ACTIVITY ACEC member T.Y. Lin International purchased Lindbergh & Associates (Charleston, S.C.) from fellow ACEC member firm O'Brien & Gere is a good example. The deal truly created a win-win situation that enables both firms to advance their respective growth strategies. The addition of L&A provided T.Y. Lin a platform to strengthen and diversify its markets across the Southeast and build its federal services program-both key strategic objectives for the firm. The divestiture allows O'Brien & Gere to reallocate and align resources toward its acquisitive growth strategy for its advanced manufacturing, energy, environment and water brands in the Southeast and nationwide. Finding the right strategic partner for the transaction allowed both firms to advance their respective strategies. Another example is when ACEC member Terracon Consultants announced in March the ownership of a new office in El Paso that was previously owned by ACEC member Raba Kistner Consultants (San States by Total Activity: US vs Int'l Sellers: 21 or more Transactions 16 to 20 by Total Activity: States Transactions 11 to 15 Transactions 21 or more Transactions 16 to 20 Transactions 6 to 10 Transactions 11 to 15 Transactions 1 to 5 Transactions 6 to 10 Transactions No Transactions Firm REPORTED through April 1, 2015Sales by StateM&A ACTIVITY 2015 Firm Sales by State through April 1, 2015 Total US Sellers Total US Int'l US Sellers toSellersFirms 75 4 Total Int'l US Firms Int'l Sellers toSellers 26 3 US Sellers to Int'l Firms Int'l Sellers to US Firms 1 to 5 Transactions No Transactions 3 WA ME 1 ND VT MN OR 6 2 SD ID WI WY NY MI 4 1 IA NE 3 NV 1 UT CO CA IL 1 IN VA 3 TN OK 1 AR NM TX 2 MS 7 AL SC GA LA 2 FL © Morrissey Goodale LLC 2015 All Rights Reserved HI 64 ENGINEERING INC. MAY / JUNE 2015 NH MA 3 CT RI 1 NJ 1 MD DE DE DC MD KY 3 AK 4 WV 1 1 AZ OH MO KS PA 3 1 4 3 Recent ACEC Deal-Makers April 2015 ACEC Member NV5 (Hollywood, Fla.) acquired Mendoza & Associates (San Francisco, Calif.). ACEC Member Terracon Consultants (Olathe, Kan.) acquired Argus Pacific (Seattle, Wash.). ACEC Member Firm STV (New York, N.Y.) acquired Diversified Project Management (DPM) (Newton, Mass.). ACEC member Rick Engineering Company (San Diego, Calif.) and Mooney Planning Collaborative (MPC) (San Diego, Calif.) announced the merger of the two firms. ACEC Member Firm Pennoni (Philadelphia, Pa.) acquired the assets of ACEC member Jones-Stuckey (Columbus, Ohio). ACEC member Parsons (Pasadena, Calif.) acquired T.J. Cross Engineers (Bakersfield, Calif.). T o 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.morrissey goodale.com. Watch the M&A Takeaway video that accompanies this article, presented by Mick Morrissey, at www.morrisseygoodale. com/ACECMergers/ MayJune2015. Sprinkler Technology Design, Inc. (Bozeman, Mont.) merged with ACEC Member 1 MT 3 8 75 TotalUS vs Int'l Sellers:26 Int'l Sellers Antonio, Texas). Raba Kistner's El Paso office will transition its employees, equipment, and current projects to Terracon, allowing for continuity of that operation. Terracon also added two soils testing and materials laboratories in Vernon Hills, Ill., and Green Bay, Wis., most recently operated by AECOM (Los Angeles, Calif.) and previously owned by STS Consultants. These additions allow Terracon to further expand its geographic footprint and add to its core services. Under the right conditions, a divestiture can create winning situations for both buyers and sellers. The key is making sure the strategies for both are aligned with the goals of the transaction and providing for a seamless transition for employees, clients and projects. NC DC 1 Coffman Engineers (Seattle, Wash.). March 2015 ACEC member Braun Intertec (Minneapolis, Minn.) acquired ACEC Member Peer Engineering (Eden Prairie, Minn.). ACEC member O'Brien & Gere (Syracuse, N.Y.) acquired Schuyler Engineering (Lindenhurst, N.Y.). Neil Churman is principal consultant of Morrissey Goodale LLC - a strategy, M&A and human capital solutions firm serving the A/E/C industry. Churman, who is based in the firm's Houston, Texas, office, can be reached at nchurman@ morrisseygoodale.com. http://www.morrisseygoodale.com http://www.morrisseygoodale.com http://www.morrisseygoodale.com/ACECMergers/MayJune2015 http://www.morrisseygoodale.com/ACECMergers/MayJune2015 http://www.morrisseygoodale.com/ACECMergers/MayJune2015

Table of Contents for the Digital Edition of Engineering Inc. - May/June 2015

Engineering Inc. - May/june 2015
Contents
From ACEC to You
Legislative Action
Market Watch
2015 Convention Wrap-Up
2015 Engineering Excellence Awards
Now You’re Connecting
Putting Minority Students on Engineering Track
ACEC/PAC Honor Roll
Guest Column
Business Insights
Members in the News
Mergers and Acquisitions

Engineering Inc. - May/June 2015