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F R O M T H E F O U N D E R
There are many variables to consider when planning for an ownership transition in an AEC firm. Observations on ownership transition
O ver the nearly 34 years Zweig Group has been in business, we have assisted more than a thousand AEC firms with their strategic business planning and ownership transition planning and processes. We have even been through our own transition twice – once externally to a private equity firm, and the second time, after buying the company back from the private equity firm’s lender, internally to a group of principals already with the firm.
Mark Zweig
It’s not uncommon to have a great deal of discussion and debate about what kind of ownership works best for these businesses over the long haul. When I say “what kind of ownership,” I am primarily referring to the big decisions about who owns the company and how many owners they should ideally have, or whether to sell externally. Most AEC firms start out the same way. Either one person or a small group of partners breaks away from either another company in this business or a government organization where the principal(s) worked, and the first employee(s) are also the owners of the enterprise. From there, other employees are added, and if everything goes well,
the business survives and grows. Then, at some point in the future, as the company grows and the founding partners age and start looking forward to their eventual exit, that’s when all of the debate starts about where they should go from there. Should more internal owners be added? If so, how many and who? Should they sell to a much larger group of employee owners? Should they do an ESOP? Should the firm sell to a larger firm and become part of a larger enterprise? Should the firm sell to a private equity firm and use the capital to buy other companies and fund more expansion?
See MARK ZWEIG, page 12
THE ZWEIG LETTER JULY 12, 2021, ISSUE 1399
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