Mergers & Acquisitions
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About Zweig Group MERGERS & ACQUISITIONS
Our team of M&A advisors are industry leaders. We seek high caliber, experienced M&A advisors and corporate executives with unique talents and perspectives who are driven to find solutions for business owners’ strategic and capital challenges. We approach each project as a cross- functional team consisting of professionals with different expertise working toward a common goal. With an extensive network that spans North America, we blend industry and sector knowledge with experience across the M&A lifecycle to help you capture value for shareholders.
Whether you’re on the buy- or sell-side of a deal, Zweig Group’s full-scale Mergers & Acquisitions advisory team can help you find and evaluate candidates and then structure the transaction – managing the complicated process from conception to the closing table while providing full scope services for buy- side and sell-side clientele. Zweig Group’s M&A team facilitated over $300MM in M&A transaction volume in 2021 and is positioned to continue advising on the rising number of deals in the AEC industry into 2022.
BUYER REPRESENTATION
SELLER REPRESENTATION
DEAL STRUCTURING, NEGOTIATION, AND DUE DILIGENCE ASSISTANCE We guide you through the process and structure a win- win deal for all shareholders involved.
Our buy-side advisory model is driven by our unique and
We have a strong track record in achieving maximum value for clients in their sale processes.
proprietary list creation, outbound inquiries, and targeted tracking.
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TABLE OF CONTENTS
The Zweig Group Difference
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The M&A Process
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M&A Knowledge
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Today’s M&A Climate
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The Results
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Meet the Team
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The Zweig Group Difference
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Data Driven Advisory Services Unmatched Visibility and Industry Recognition.
The combination of awards programs and industry research provides an in-depth knowledge of firm structure, culture, operations, and strategies. Our advisory team works on all aspects of firm management, bringing unique context to all advisory engagements.
LEADER IN RESEARCH
Over 20 surveys published annually covering every major topic in AEC firms today, amassing over 2.4 million data points.
Research Reports
Weekly Industry Newsletter
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Awards Programs
Media
AUDIENCE & REACH
REACH | 223,720 Monthly Website Pageviews | 121,800 Monthly Flipbook Pageviews | 35,000 Digital Magazine Subscribers | 38,400 Facebook Page Likes | 25,100 Twitter Followers | 2,700 Instagram Page Followers | 720
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Learning
Podcasts, Blogs, Media
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Books
Industry Conferences
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Complementary Services One thing that we bring to the table is a wide range of advisory services that often go hand-in-hand. We are a “one stop shop” for advisory services and can help a firmwith:
Strategic Planning
Ownership Transition
Valuation
Firms with strategic plans are 12% more profitable. We get your team thinking strategically.
We help you develop solid and actionable plans designed with your firm’s unique and nuanced needs at the core of our practice.
Every strategic decision impacts an AEC firm’s value. Understanding where your firm stands in today’s market requires industry expertise.
Mergers & Acquisitions
Marketing & Business Development
Risk Management
We blend industry expertise and unrivaled visibility for a seamless transaction that is so much more than a “transaction.”
We develop campaigns to invigorate your brand, differentiate your firm and build relationships that drive business to your bottom line.
We can help turn your risk from just a liability to an asset and cash profit center.
Education & Training
Executive Search
Survey Findings
The #1 requested benefit from employees is professional development. We provide all the training your firm needs to grow your people so your firm can grow.
Talent is hard to come by. We put our talented team-and our expansive network-to work for you to identify and secure the greatest assets of any AEC firm.
We provide survey findings on topics ranging from compensation to top performing industry procedures and benefits.
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The M&A Process
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Key Milestone in the M&A Process
Identifying Targets
Initial Contact Evaluation
Preparation
Preliminary Due Diligence & Indication of Interest
Further Due Diligence
Letter of Intent
Final Agreement
Negotiation
Closing
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Buy-Side Process
Development
Going to Market
Closing
Phase I: Preparation
Phase III: Initial Contact
Phase V: Offer & Execution
• Kick-off meeting to discuss ideal prospective partners (“prospective targets”) based on our established buying criteria. • Clearly articulate the buy-side process with the deal team to ensure we’re all working towards an effective and timely execution. • Extensive research on the market to fully understand the dynamics driving M&A transactions.
• This involves confidentially contacting approved potential targets using a one-page teaser. • Conduct phone interviews to gauge viability of prospective target. • Once interest has been indicated and confirmed, a mutual NDA is executed. • Simultaneously, ZG organizes an introductory call between the Buyer team and the prospective target. • Profile interested targets based on fit, interest, and transactional ability.
• Develop term sheet based on valuation and optimal price and optional deal structure. • Once a term sheet has been submitted, ZG provides input and recommendations as we evaluate offers and negotiate deal structures, leveraging ZG’s deep repository of industry- specific knowledge, surveys and data. • ZG manages the request and distribution of additional information (RFI) through the data room. been signed, ZG assists in coordinating reviews with legal representatives and prospective buyer. • Buyer’s legal team will assist with review and negotiation of the purchase agreement, employment agreements, etc. • Once an LOI or IOI has
• Utilizing Zweig Groups Phase II: Identifying The Universe of Prospective Targets
Phase IV: Further Contact & Information Gathering
proprietary database along with research. potential targets based on our established buying criteria and fit. • Identify the right contact within the firm. • Secondary source data collection. • Develop an extensive list of
• ZG maintains communication with potential targets. • Selection of short list of qualified targets then conduct company visits and management interviews. • ZG manages the request of additional information (RFI). • Valuation and financial analysis based on current market trends and industry specific deal dynamics
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Sell-Side Process
Development
Going to Market
Closing
• Identify value drivers and detractors – that is, the factors that can positively or negatively impact the valuation of the business. • Prepare marketing documents that describe the firm’s business, history, management team, and prospects for the future. • Develop an extensive list of potential buyers based on fit. • Identify the right contact within the firm. Phase II: Identifying The Universe of Select Buyers: Phase I: Research, Analysis & Valuation:
Phase III: Initial Contact
Phase V: Offer & Execution
• This process includes helping the buyer complete their “due diligence” as well as negotiating deal terms. • Once an LOI has been submitted, ZG provides input and recommendations as we evaluate offers and negotiate deal structures, leveraging ZG’s deep repository of industry- specific knowledge, surveys and data. • ZG manages the request and distribution of additional information (RFI) through the Data Room. • Once an LOI or IOI has been signed, ZG assists in coordinating reviews with legal representatives and the prospective buyer. • The Seller legal team will assist with review and negotiation of the purchase agreement, employment agreements, etc.
• This involves confidentially contacting approved potential buyers using a one-page teaser. • Conduct phone interviews to gauge viability of prospective buyer. • Once interest has been indicated and confirmed, an NDA is executed, and marketing documents are distributed. • Simultaneously, ZG organizes an introductory call between The Seller team and the prospective buyer. • Profile interested parties based on fit, interest, and transactional ability.
Phase IV: Further Contact & Information Gathering
• ZG maintains communication with potential buyers. • Selection of short list of qualified parties then conduct company visits and management interviews. • ZG manages the request and distribution of additional information. • Goal : Solicitation of initial offers – term-sheet, IOI, LOI.
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Core Deal Team
Core Deal Team
Support Advisory
STRATEGY ADVISORY SERVICES
DIRECTOR OF ADVISORY SERVICES, MANAGING PRINCIPAL Jamie Claire Kiser
EXECUTIVE SEARCH ADVISORY SERVICES
OUTREACH & COMMUNICATION Advisory Team
OWNERSHIP TRANSITION ADVISORY SERVICES
VALUATION SERVICES
FINANCIAL ANALYSIS & INFORMATION FLOW Analyst Team
MARKETING ADVISORY
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M&A Knowledge
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Drivers of Value
• Growth Rate • Profitability • Consistency of Performance • Quality of Financials
• Brand Name • Specialization • CEO Successor/Second Tier Management • Staff Quality • Client/Potential Client Database • Client Concentration • Bench Depth of Key Sellers • Reduction of Debt
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Today’s M&A Climate
• Valuations overall have increased anywhere between 14%-30%, depending on the source and firm specifics. • It’s all about EBITDA in negotiations; net service revenue is no longer a “governor” on valuation. • Changing tax rates and confidence in backlog changing deal structuring rapidly from “rule of thumb” precedent.
• Private equity changing the negotiation pace and deal-making process. • Stock transactions becoming more frequent for smaller deals. • Retention strategies and stay bonuses top of mind as “great resignation” looms. • Cross-border and international transactions show confidence in the market.
2021 Transactions by Market Sector
This graph outlines the main markets served by both buyers and sellers. As expected, Hospitality-only firms aren’t really a hot commodity following COVID. On the other hand,
markets likely to be affected by the Infrastructure bill like municipal, transportation, water/wastewater, and federal are all seeing a good bit of selling activity. The ‘Other’ category is high due to Private Equity and niche firms.
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Today’s M&A Climate
Historical Deal Activity
This graphs shows the number of M&A deals that closed in the AEC industry each year since 2014. As you can see, 2021 was extremely hot as there were 200 more deals that closed compared to 2020.
Main Service of Buyers & Sellers
This graph shows the primary service focus of both buyers and sellers. You can roughly see in this graph that Civil Engineering firms are buying up firms that are offering complimentary services to theirs. The other service line where buyers exceed sellers is ‘Other’ which includes Private Equity as well as other niche firms that don’t neatly fit in our typical AEC firm classifications.
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The Results
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M&A Advisory Services: Results Zweig Group’s M&A team facilitated over $300MM in M&A transaction volume in 2021 and is positioned to continue advising on the rising number of deals in the AEC industry into 2022. Listed below are only a few of our recent transactions. If you wish to see our full list of M&A announcements, please visit our website.
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Zweig Group’s M&A Team
Will Anderson Analyst Dallas, TX
John Bray, CM&AA Advisor Dallas, TX
Andy Chavez, CM&AA Senior Analyst Dallas, TX
wanderson@zweiggroup.com 501.766.0603
jbray@zweiggroup.com 314.753.0019
achavez@zweiggroup.com 817.600.4434
Adrian de la Garza Analyst Dallas, TX adelagarza@zweiggroup.com 972.922.7597
Drake Hamilton Senior Analyst Dallas, TX dhamilton@zweiggroup.com 903.748.1624
Justin Ramirez, Esq. Advisor Fayetteville, AR
jramirez@zweiggroup.com 870.270.3266
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Prior to joining Zweig Group, Jamie Claire practiced law and also worked in commercial banking. She joined Zweig Group in 2015 with an initial focus on M&A and has transactional experience with businesses in all stages, from new firms with growth needs to established firms seeking to wind down. After being promoted to Director of Advisory Services in 2016, her responsibilities increased to include strategic leadership over all of Zweig Group’s consulting areas, including valuation, ownership transition consulting, marketing consulting, M&A, recruiting and executive search, and strategic planning. Jamie Claire holds a Masters of Business Administration, Juris Doctor, and Bachelors of Arts in History. She is a managing principal at Zweig Group and serves on the firm’s board of directors. Additionally, she is an outside board member to Miyamoto International, based in Sacramento, CA; and is on the board of the Buffalo River Foundation, a 501(c)(3) nonprofit dedicated to conserving the Buffalo National River. Recently, she founded the platform ElevateHER as part of Zweig Group’s mission to Elevate the Industry.
Jamie Claire Kiser Managing Principal & Director of Advisory Services
jkiser@zweiggroup.com 479.530.4184
Passionate about the business side of design and technical service firms, Chad has built a career on leading them through growth and change. He has worked with AEC firms throughout the U.S. on a variety of needs – strategic business planning, turnarounds, partner separations, organizational restructuring, mergers and acquisitions, marketing and sales, growth campaigns, and more. As a registered professional engineer, Chad brings an in-depth knowledge of what makes professional service firms and the people who work for them unique. Working in the industry for more than 20 years, he has been involved in many aspects of the business including design, project management, department management, regional office management, and directional leadership. He holds a MBA and BS in Civil Engineering from the University of Arkansas and is a registered professional engineer in several states.
Chad Clinehens, P.E. President & CEO
cclinehens@zweiggroup.com 501.551.2659
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zweiggroup.com
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