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FOR YOUR BOOKSHELF With all the changes the A/E industry has faced in recent years, more firms than ever are including a merger or acquisition in their strategic plan. If you think a merger or acquisition may be in your future – and even if it’s not currently in your firm’s plan – you’ll want to see the results in the 2016 Merger

JAMIE CLAIRE KISER, from page 9

as their starting point metric. My contention with starting with a multiple of EBIT, or EBITDA, is that many firms have negative profit, which would make their value ... negative? Plus, using a multiple of profit overlooks one of the major opportunities that exists in M&A – a buyer managing the firm more e ffi ciently than the previous owner using the same revenue stream, at least initially. Profit is not a worthless metric, to be sure, but it does begin a discussion early on about add-back items (items that would be ongoing versus those that would end when the deal closes). “According to our 2016 Merger & Acquisition Survey of AEP & Environmental Consulting Firms , the median price paid as a percentage of net service revenue was 73 percent.” Other metrics that are frequently utilized in M&A negotiations include a multiple of adjusted book value (or a multiple of adjusted owner’s equity, to state it another way), a weighted average approach to either revenue or profitability to smooth out spikes over several years, or a price paid per employee. Smart firms in M&A use more than one “rule of thumb” metric to guide the discussions and to help propose an initial value, but they always keep in mind that there is a strategic value to any firm that is beyond the spreadsheet. Additionally, they are always ready to incorporate new information or new adjustments into the figures. Th ings will not be as flat and straightforward as they appear on the financial statements for any firm once you progress into due diligence and learn more about the firm’s operations. JAMIE CLAIRE KISER is Zweig Group’s director of consulting. Contact her at jkiser@zweiggroup.com.

& Acquisition Survey of Architecture, Engineering, Planning & Environmental Consulting Firms . It’s the most comprehensive report available on the real buying, selling, and merging activity in the AEC industry today. If you’re considering selling your firm, use

the Merger & Acquisition Survey to: z Find out what today’s buyers are looking for – who, where, and what z See what kind of price you can expect for your firm z Learn what’s motivating other sellers like yourself, and what buyers are hoping to achieve through an acquisition If you’re considering buying another firm, use the Merger & Acquisition Survey to: z Learn how long it takes to buy or sell a firm, from start to finish z Find out how many firms are satisfied with the acquisitions they’ve made z If you’ve recently completed a merger or acquisition deal, use the Merger & Acquisition Survey to: z Learn how the price you paid or the amount you received compares with other similar deals z Find out if your peers or competitors also recently completed any transactions z Compare the success of your firm’s transactions with other firms’ successful (or not successful) transactions For more information, visit bit.ly/2icxrAg or call 800.466.6275.

CINDY MARTENS, from page 11

sense to do so. Our marketing manager, Peggy Amor, CPSM, regularly works from home after her kids are in bed, allowing her to have a shorter day in the o ffi ce and pick them up from day care. When client meetings stack up around town and it doesn’t always make sense to come back to the o ffi ce, co-workers can make the most of their time by working from a local co ff ee shop, not just the o ffi ce. “We have written policies for telework and flexible schedules – and people use them. When practical, co-workers are supplied with laptops so they are free to work from other locations when it makes sense to do so.” “ Th e first thing out of my mouth whenever people ask me what I like about A ffi nis is always ‘flexibility,’” Amor says. “Our leadership demonstrates that finding balance is important to them personally, which empowers the rest

of us to do the same. Th e freedom to be with my kids for quality time in the afternoons helps me be 100-percent present at work and for family time.” Th ese “balance” oriented policies are successful because of several other A ffi nis values – collaboration, servant leadership, and trustworthiness. Co-workers’ willingness to support each other at work and away from the o ffi ce helps everyone strike a work/life balance while assuring project deadlines are met, and our clients consistently get the support they need. CINDY MARTENS, SPHR, SHRM-SCP, is manager of recruitment and retention at Affinis Corp. She can be reached at cmartens@affinis.us.

THE ZWEIG LETTER January 9, 2017, ISSUE 1182 30, 2017, I SUE 185

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