We’ve all heard it, the best measurement of a city’s growth is the number of cranes and projects going up. We’ve all heard buzzwords about Austin, TX being an “IT” city, but it’s not just Austin that is sprawling with new developments and high-rises. Stop and think about this type of buzzing activity throughout a 70 mile stretch from San Antonio, the home of the Alamo, to Austin-Roundrock. This, my friends, is the I-35 corridor, a stretch of interstate highway that connects San Antonio, San Marcos, Austin and Dallas. Almost everyone has benefited one way or another from the massive growth happening in the region. Better jobs, more activities for the young professionals, and an overall increased quality of life. The growth in the region has, of course, brought upon Central Texas its unique set of challenges that one does not think of
No, it is not practically unaffordable real estate and rent. The biggest challenge lies in making these interconnected cities feel like home 24/7. Going home sure in the knowledge that the roads will be safe, our lights will turn on, and that water will flow when we take a shower after a long jog in Town Lake (Lady Bird Lake for you non-Austinites).
With the increased growth in population over last decade, the Central Texas region, that is known as the i-35 Corridor, has experienced its unique set of challenges. While home builders and apartment complexes make fortunes from overpriced property values, there is an unsung hero behind the scenes: the engineers who make all this growth possible. As mentioned previously, everyone expects their roads to be safe, their lights to turn on, and their water to run. In Texas, these are all major engineering feats. No, we’re not just flatland sitting on enormous oil and gas reserves. Central Texas is home to the Hill Country, one of nature’s gifts to the world; and as its name implies, it has plenty of hills.
So, how does one exactly get water to flow up the hill? Well, we didn’t know the answer either, and quite frankly, we still don’t, but some of the Benchmark International teammates live on top of hills. So, not having water up there would be a problem. Engineering firms in Texas have long solved problems before the growth spurt in Central Texas. The Colorado River dam for example, or the Houston Port.In order to make up for lost time, we have seen that many industry players are aggressively chasing deals in the Architecture, Engineering Consultancy (AEC) Industry. These businesses have seen massive interest in the last couple of months as projections for growth in the region continue to be positive. In addition, consolidation from major national firms and regional firms is taking place. Supply and demand determines price, and in this case, the demand for these firms has been very high. Furthermore, Central Texas residents have a reputation for their strong support of local businesses. This is where bigger players, from out of town, that want to set up shop in a place like Austin, face a myriad of challenges. Central Texas has a sense of community that is surprising given the immigration it has seen over the last decade. Business owners such as home builders, contractors, and developers have built strong relationships with local architects and engineers. Local business owners know the right people and have the right relationships to get projects approved and licensed. New players, not so much.
Central Texas is a region where it would make more sense for a player in the AEC Industry to make an acquisition. A successful acquisition will reduce the amount of time and financial resources needed to complete their objective. A perfect example of how a buyer can take advantage of the opportunities in Central Texas is Civil & Environmental Consultants Inc.’s recent acquisition in Austin. Another example is the recent acquisition by LJA Engineering of a local Austin firm that served municipal, commercial, industrial, and private sector clients in Texas. LJA is a multidisciplinary engineering firm with over 600 employees nationwide. These are all but a few of the deals that are taking place in the region. Currently, Benchmark International’s Austin office is representing several well very respected local and regional Architecture and Engineering firms.
Benchmark International anticipates that the next couple of years will be the years of opportunity for the AEC Industry. Many sellers are open to the possibility of exiting the market to pursue retirement, and others are open to working alongside a buyer to position themselves for the continuous growth of the region. With the market poised to have an increase in activity, it is only natural to expect healthy multiples on the sales of engineering firms. For sellers, now would be the time to look at their businesses and look closely at the benefits of reduced debt cost and higher margins, amongst others. On the other hand, buyers will benefit from having an experienced team that is diligently working on their behalf to meet growth goals. Benchmark International’s regional Texas office has vast experience in Engineering and Architecture deal making, which report major increases in activity throughout the entire Texas market.
Now is the time to contact a Benchmark International expert to get more information on Engineering and Architecture, deals that cover the entire industry scope of Civil Engineering, Structural Engineering, Architecture and Design. In conclusion, Benchmark anticipates that 2018 will be the year that AEC deals break records.
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of
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Call Benchmark International today if you are interested in an exit or growth strategy or if you are interested in acquiring.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkCorporate.com
Europe: Carl Settle at +44 (0)161 359 4400 / Settle@BenchmarkCorporate.com
Africa: Anthony McCardle at +2721 300 2055 / McCardle@BenchmarkCorporate.com