Engineering and architecture firm mergers and acquisitions are on the rise in the Pacific Northwest as local firms seek to expand their services and grow.
David Eckberg, a shareholder in Schwabe, Williamson & Wyatt’s Seattle office with 30 years of experience serving the building industry, is seeing an uptick in mergers and acquisitions and does not foresee the trend slowing.
One factor, Eckberg said, may be firms emerging from COVID-related closures. Firms that performed well during the closures are aggressively seeking to grow, he said.
Another factor is federal money keeping engineering firms busy. The $1.2 trillion Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, was signed into law in 2021, and authorized issuance of funds to rebuild roads, bridges, rails and more.
Mergers offer a strategy for quick business growth, Eckberg said. They also can sometimes create an exit strategy for founding owners to sell their shares or invest in another company.
“It (also) allows firms to provide staffing they may not otherwise be able to get through just hiring,” he said.
AKS Engineering & Forestry LLC (AKS) and Tenneson Engineering Corp. (TEC) merged in July. The deal expands AKS’ geographic reach and provides TEC with additional resources and expanded capabilities.
TEC will operate as “Tenneson Engineering – an AKS Company” for the next few years and then transition to be known as AKS.
Blair Carlson, managing member at AKS, stated in an email that TEC provided several similar services as AKS but also brought unique skills and experiences that AKS did not already have in-house, such as special inspections and serving as the consultant of record for many local jurisdictions in the Columbia Gorge.
Design firms YGH Architecture (formerly known as Yost Grube Hall) and Integrus Architecture merged in June 2022 and became Integrus, a collaboration of YGH & Integrus Architecture.
“Our work has always been diversified even while focused in the public arena, both locally and abroad, enabling us to survive any number of challenging economic factors,” Tom Robbins, principal and managing partner of Integrus’ Portland office, stated in an email.
Robbins added that the merger strengthens this approach through project diversity and an expanded footprint in the Pacific Northwest. It allows the firm to continue work with existing clients, while also providing opportunity for the next generation of firm leaders to pursue new work and build client relationships.
In May, Emerio Design acquired Reece & Associates, an engineering and planning firm in Albany. Reece & Associates is continuing to operate as a separate business under the new name Reece Engineering & Survey.
Neil Fernando, owner and founder of Emerio Design, stated in an email that the acquisition of Reece & Associates puts the company in a better position to mitigate potential downturns in the market, but also pursue opportunities when conditions are favorable. The acquisition diversified the firm’s geographic footprint, added areas of expertise, and bolstered their client list.
When considering a merger or acquisition, Eckberg said, firms should ask if it makes sense from a strategic standpoint and if it is a business sector it wants to enter, and whether the other firm has the staff resources it’s trying to acquire.
“Initial conversations centered around hypothetical discussions regarding the potential of the merger and confirmation that both firms held a general alignment of values,” Carlson stated.
With the merger, AKS can now serve a new region with employees who are like-minded.
“With AKS’ added horsepower, we’ve strengthened all of our capabilities, enabling us to take on more projects in the region and enhance our responsiveness and efficiency in supporting clients’ needs – especially with having TEC’s crews an hour and a half east of our other offices,” Carlson stated.
For YGH, the merger gave the firm a deeper bench of experts in their market sectors. The deal also provides greater opportunity for the next generation of leaders to grow the practice.
The blended firm recently hit its first-year milestone and is working through a multiyear merger plan. An important step was for team members to initiate a brand and positioning effort to unite the firms with fresh messaging and a vibrant new website, Robbins stated.
“Just by the number, we’ve been able to increase overall revenue due to the new services Emerio brought to Reece’s existing portfolio of business,” Fernando said of the acquisition.
This includes services such as surveying, structural engineering and residential design. Emerio Design has also been able to expand services in the mid-Valley and coastal areas.
Read the full article in the Daily Journal of Commerce.
This article was republished with permission from the Daily Journal of Commerce.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.
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