Mid-Year Engineering M&A Update-Mid-Year Engineering M&A Update Slides

Mid-Year Engineering M&A Update Slides

Pdf Summary

The Mid-Year Engineering M&A Update, presented by Steve Gido of ROG Partners on June 8, 2023, provides an overview of the current landscape and trends in mergers and acquisitions (M&A) within the engineering industry. ROG Partners offers nationwide financial advisory services including sellside and buyside representation, private equity advisory, valuation, and executive consultation.<br /><br />The presentation highlights the industry’s strong performance following several record years, amid challenges such as talent shortages, inflation, baby boomer retirements, and robust capital inflow. Year-to-date (YTD) M&A activity is down 6%, with median buyer and seller sizes at 375 and 18 employees, respectively. Florida and Texas are prominent locations for sellers. Private equity (PE) continues to be active, making seven new U.S. platform investments and representing about 25% of deals. Strategic buyers seek growth, scale, and diversity, focusing on the Southeast and Southwest, and often compete with PE firms.<br /><br />Key drivers influencing valuations include firm size, growth, profitability, service mix, client concentration, geography, and certifications. Engineering firms typically see EBITDA multiples between 4.0x to 6.0x. The M&A process includes stages from courtship to integration, typically lasting 6 to 12 months. Transactions can be asset or stock purchases, each with tax and liability implications. Consideration forms can be cash, promissory notes, stock, or earnouts. Employment agreements address roles, compensation, term, and covenants.<br /><br />Closing involves due diligence and contract finalization, while integration focuses on aligning people, benefits, systems, and communication. The presentation underscores the importance of strategic fit, cultural compatibility, and clear communication to ensure successful M&A outcomes in the engineering sector.

Keywords

Engineering M&A

ROG Partners

Financial advisory

Private equity

Mergers and acquisitions trends

Valuation drivers

EBITDA multiples

Talent shortages

Strategic buyers

M&A integration