TZL 1183

T R E N D L I N E S W W W . T H E Z W E I G L E T T E R . C O M J a n u a r y 1 6 , 2 0 1 7 , I s s u e 1 1 8 3

Engineering salaries

What I have learned about M&As in the past year

2 016 was quite a year for the AEC industry and for Zweig Group as well. Merger and acquisition activity, and interest in the subject, has never been higher than it is right now. Our firm was involved in many transactions this year, and I was personally involved in most of them. Here’s some of what I learned this year about M&A in our field: 1)Auctions are coming. We have seen several in the last year. Some of the letters we have seen are amazing in that they are so brazen. “We will be reviewing all offers made by such-and- such date (about 10-14 days from date of let- ter). All interested parties must have (specific financial criteria listed).” Pretty crazy stuff! We had one client who made an offer under these circumstances and did actually end up acquir- ing a significant firm. We had another client that lost a firm they were in discussions with when their advisor turned it into an auction. With the number of qualified buyers out there in the market I think we’ll be seeing more of this. 2)Many sellers have completely unrealistic ideas of what they are worth. There are shady investment bankers and business bro- kers who put on seminars (who says there is no such thing as a free lunch?) where they talk about things such as “unlocking the equity in your ____________ firm.” Their entire goal is to get wannabe sellers to list their firms with them and for so much money per month for a period of six months or a year they will prepare a “pitch book” and market the sellers to poten- tial buyers. Along the way, they inflate the sell- ers’ expectations to where they think they are

“2016 was an amazing year, filled with lots of success as well as great learning opportunities for me and the rest of our M&A folks at Zweig Group.”

According to Zweig Group’s 2017 Salary Survey of Engineering Firms , entry-level engineers were hired at a lower base salary, -3.7 percent, than they were the year before. The typical newly licensed engineer also experienced a lower base salary, -9.7 percent, compared to the year before. Project managers and department managers experienced wage growth of more than 4 percent and the wages of principals grew almost 10 percent. Total salary increases, across all firms and disciplines, amounted to around 4.5 percent. (Special discount to TZL subscribers: Use code SRVY35off to order surveys at 35 percent off at zweiggroup.myshopify.com/collections/ frontpage) F I R M I N D E X Atwell, LLC. ..........................................10 EYP Inc.................................................12 Fluor Corporation....................................4 Gensler.................................................10 HED........................................................5 Jacobs Engineering Group Inc................8 Quartus Engineering Incorporated...........2 Stanley Beaman & Sears.......................12 WHR Architects. ...................................12

Mark Zweig

MORE COLUMNS xz MARKETING MATTERS: Do you trust the marketing robots? Page 3

xz GUEST SPEAKER: A champagne toast Page 5

xz FROM THE CHAIRMAN: Preserving finite resources Page 9 xz GUEST SPEAKER: Strategies to survive the next recession Page 11

See MARK ZWEIG, page 2

Employee fullfilment

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T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U L T I N G F I R M S

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