Engineering and Environmental Services

The Engineering Services industry covers companies that design and develop processes, structures, machines, and instruments. Environmental consulting services includes advice and assistance to others on environmental issues, such as controlling environmental contamination from pollutants, toxic substances, and hazardous materials. Austin Dale Group has many years of advisory experience working with engineering and environmental companies.

Industry Trends

  • Municipal Utilities – Renewed investments in roads, water and wastewater, hydrology and other public infrastructure will require increasing amounts of professional engineering services, environmental services, and project management.
  • Scale – The value of private, non-residential and industrial construction is forecast to grow over the next five years. Engineering firms will need size and scope to design and manage complex commercial and industrial projects.
  • Eco-friendly Energy – The transition away from fossil fuels drives renewable energy solutions and engineering firms are developing systems and infrastructure to deliver these new technologies.
  • Green Building Design – Engineering firms are implementing LEED standards and influencing projects to incorporate sustainable materials and lower building operating costs.
  • Innovative Technologies – Using drones for LIDAR and thermal imaging, plant layout and land surveying. Projects are now being delivered using new technologies and engineering firms are leading the way.
  • Consolidation – Most engineering firms are smaller, independent operators, but industry consolidation has been active and will continue. Small firms are at a disadvantage in recruiting and retaining younger staff and do not benefit from the economies of scale experienced by larger firms.

Value Drivers

  • Industry Specialization – Firms that have developed expertise in areas of practice that are in high demand, including environmental services and specialized engineering verticals.
  • Contract Backlog – Buyers want to make sure that the firms they acquire have a steady stream of profitable projects stretching a year or more into the future.
  • Profitability – A stable history of growth and profitability demonstrate to buyers that the firm can bring in projects and execute them successfully.
  • Professional Staff – A bench of talent with professional engineers, engineers-in-training, surveyors, machinists, draftsmen and support staff, because technical talent is becoming a scarce resource.
  • Technology Proficiency – A demonstrated ability to deploy the latest technology.

What Buyers Want

  • Industry specialization – Firms that have developed expertise in areas of practice that are in high demand are more attractive to buyers.
  • Contract backlog – having a backlog of profitable projects is another key driver of value. Buyers want to make sure that the firms they acquire have a steady stream of profitable projects stretching a year or more into the future.
  • Profitability – firms that have a stable history of growth and profitability demonstrate to buyers that the firm has developed a staff that can bring in projects and execute them profitably. Firms with a history like this are very marketable.
  • Professional staff – firms that have a bench of talent with professional engineers, engineers-in-training, surveyors, machinists, draftsmen and support staff are desirable acquisition candidates because technical talent is becoming a scarce resource.
  • Technology proficiency – firms that have a demonstrated ability to deploy the latest technology in their projects are also desirable to buyers as they increasingly adopt these technologies themselves.