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the new company. It could easily take 18 months for people to get comfortable with the changes that occur and to discover whether the buyer has lived up to the promises made. At Westwood, we work hard to integrate the seller at a pace that is comfortable for them. We listen to the challenges and work very hard to overcome them. This is a people business and our number one priority is to take care of the people. “Each acquisition has its own challenges, but most revolve around the people. Change is difficult and it is the seller’s and buyer’s responsibility to help the people integrate into the new company.” TZL: What do you think is the most important skill that sets you up for success? Does your engineering background play a role? How? KH: An engineering background does help with my role as it’s geared around solving problems. There’s always an opportunity with every challenge. The most important skill set that helps us be successful is our ability to listen, relate, and work toward a common solution. TZL: Tell me a little about the process involved when it comes to researching potential mergers and acquisitions? How are they researched? How long does it take? Who’s involved? KH: Finding the right company to acquire is quite extensive. Are they looking to sell? Brokers have been amazing at bringing opportunities to us. The more experience the broker has in our industry the better. Warm introductions work the best. Cold calling never goes away. Every cold call that gets answered at least ends up in a good conversation and perhaps someday an acquisition. The internet and well-crafted CIMs are helpful in getting the due diligence started. We like to have as much information as possible upfront to help put together a good valuation. Brokers that educate the sellers on the true value of their company are exceptional. A thorough due diligence period takes about 90 days and if the seller is not truly a seller, this process could take several months to develop the relationship to the point where it’s time to take that next step. At Westwood, our initial calls involve just a few people and as the potential increases, we bring in the appropriate people to help each side get to know each other
better (HR, finance, directors of specific services or markets, etc.). TZL: How many acquisitions has Westwood completed since you joined them in 2019? KH: Three. TZL: How does Westwood attract so many strong acquisition partners in such a competitive M&A environment? What differentiates you? KH: We’re looking for great partners who we can work with for several years into the future. We’re not looking for someone who just wants the highest payout and then is gone. There are companies out there that recognize this and that they will not just become a number in a much larger organization. TZL: What advice would you have for a buyer or seller that is considering M&A for the first time? KH: Do your homework. Ask the right questions. What type of buyer are you looking for – PE, public, or a company like yours? Attend some conferences to learn about all the options. Are you ready to take that step of not being in charge? Make sure the leadership/culture you are teaming with fits yours. TZL: Many expect record transaction volume in 2022, but high valuations and macro factors such as inflation, talent shortages, and rising material costs bear watching. How has the risk environment changed in the last two years? Will transaction volumes wax or wane amid a dynamic business landscape? KH: The transaction volume in 2022 will be high as many companies are enticed by the higher valuations being presented at each offer. I believe there will be a pull back as inflation and the threat of a recession becomes more of a reality, but that will be delayed. Especially with the infrastructure bill out there. Companies that focus on private development will be hit first, presenting an opportunity for buyers. Companies that are positioned well will continue to acquire for quite some time. “We’re looking at which markets may be affected by a recession. We’re also looking for opportunities that might present.”
HEADQUARTERS: Minneapolis, MN
NUMBER OF EMPLOYEES: 1,250
YEAR FOUNDED: 1972
OFFICE LOCATIONS: Nevada, Florida, Arizona, Colorado, Kansas, Minnesota, New York, North Carolina, Pennsylvania, Texas, Wisconsin
MARKETS: Power, Wind, Solar, Energy
Storage, Power Delivery, Commercial, Residential, Industrial, Institutional, Aviation, Municipalities
SERVICES: Civil, Surveying, Water Resources, Water/ Wastewater,
Transportation, Planning, Landscape Architecture, Environmental, Construction Management, Electrical, Substation, Transmission & Distribution, Geotechnical, Structural
See TAKING CARE OF PEOPLE, page 8
© Copyright 2022. Zweig Group. All rights reserved.
TOBER 31, 2022, ISSUE 1463
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