Nine engineering firms leading in firm acquisition

Morrissey Goodale reports on nine of the top engineering firms leading industry consolidation in the AE industry.

By Morrissey Goodale January 8, 2024

2023 was a big year for industry consolidation. Some 430 design and environmental firms were acquired or merged last year, down almost 11% from the record 480-plus transactions in 2022. For all intents and purposes, deal-making returned to 2021 levels, most likely due to elevated interest rates impacting the decision-making of a number of potential acquirers.

But even as overall industry consolidation slowed in 2023, there were a number of firms that made multiple acquisitions in pursuit of their strategic objectives. Today we take a look at nine of those firms—the nine movers and shakers that made the most acquisitions in 2023. Among them, they made 59 acquisitions last year (collectively they were acquiring about five firms a month) and were responsible for almost 14% of the consolidation that took place in 2023. Let’s take a closer look at these industry movers and shakers:

  1. Bowman Consulting Group (Reston VA) (ENR #87) (NASDAQ: BWMN): Bowman announced 12 acquisitions in calendar 2023, including the addition of full-service engineering firm Hess-Rountree (Phoenix, AZ) in December. Since going public in 2021, Bowman has been on an impressive growth trajectory, jumping 31 places on the 2023 ENR Top 500 Design Firms list. Acquisitions continue to be a core part of the firm’s growth plans. Per Gary Bowman, chairman & CEO, in the firm’s Q3 earnings call last November, “I am pleased to report that our (M&A) pipeline remains full of adjacency-focused opportunities within our target size and profile. We expect to continue to be active acquirers during the remainder of this year and into 2024.” Last year, the firm added some 400 employees in 11 states—Arizona, New Mexico, California, Nevada, South Carolina, Oklahoma, Texas, New York, Florida, Maryland, and Georgia—through acquisitions.
  2. UES (ENR #26) (Orlando, FL): This fast-growing, privately held, 4,000-person engineering and consulting firm announced seven acquisitions in 2023. The firm made two acquisitions in Houston alone last year—the first in June of 170-person Riner Engineering and the second in December of environmental consultant InControl Technologies. In calendar 2023, UES added over 300 employees through acquisitions in Texas, Arkansas, Florida and Alabama. The firm rose six places on the 2023 ENR Top 500 Design Firms list.
  3. RMA Companies (Rancho Cucamonga, CA) (ENR #146): This technology-enabled laboratory testing, inspection, and quality management services firm received a strategic investment from OceanSound Partners, LP in September 2021. Since then, RMA has gone on to make multiple acquisitions, including seven that it announced in calendar 2023. Its most recent acquisition was in December of 300-plus person geotechnical engineering, environmental consulting, material testing, and ground motion consulting firm Rone Engineering (Dallas, TX). Over the past year, RMA added close to 600 employees through acquisitions in Texas, California, Florida, New York, and Washington. RMA rose 36 places on the most recent ENR Top 500 Design Firm list.
  4. Verdantas (Dublin, OH) (ENR #149): Backed by private equity firm RTC Partners, this 1,000-person environmental consulting, sustainable engineering, modeling, and digital technology firm made six acquisitions last year. It rounded out 2023 with the acquisition of GRP Engineering (Petoskey, MI), a utility consulting and electrical engineering firm serving the power market. Over the course of 2023, Verdantas added close to 500 employees through acquisitions in Michigan, Ohio, New Jersey, South Carolina, Pennsylvania, and California. The firm rose 46 places on last year’s ENR Top 500 Design Firm list.
  5. SAM, LLC (Austin, TX) (ENR #88): One of the nation’s largest geospatial and inspections firms also announced six acquisitions in calendar 2023. Backed by Peak Rock Capital in 2021, SAM’s most recent acquisition was that of full-service geomatics firm Wellston Associates (Warner Robins, GA) in October of last year. In the course of 2023, SAM added over 100 employees in Washington, South Carolina, Texas, Georgia and Maryland through acquisitions. The firm jumped 15 places on the 2023 ENR Top 500 Design Firms list.
  6. IMEG (Rock Island, IL) (ENR #57): With a focus on the built environment, building optimization, infrastructure, planning, and construction engineering-related services, this 2,200-person national engineering and design firm—and recipient of the 2023 Morrissey Goodale Most Proficient and Prolific Acquirer Award—also announced six acquisitions last year. It made two impressive acquisitions in New York alone, namely Lilker Associates (New York, NY) and Cameron Engineering & Associates (Woodbury, NY). IMEG jumped 14 places on the 2023 ENR Top 500 Design Firms list and added some 350 employees through acquisitions in Pennsylvania, Florida, Texas and New York.
  7. Salas O’Brien (Irvine, CA) (ENR #54): With locations across North America and 2,400-plus employee owners, this engineering, construction management, technology, and commissioning firm made five acquisitions in 2023. The firm’s most recent acquisition was of EME Consulting Engineers (New York, NY) in August. Salas O’Brien added over 300 employees through acquisitions in 2023 in California, Georgia, Ohio, New York and Florida. The firm jumped 24 places on this year’s ENR Top 500 list.
  8. Atwell, LLC (Southfield, MI) (ENR #74): This fast-growing, privately held, full-service consulting, engineering, and construction services firm that serves the real estate and land development, power and energy, and oil and gas markets made five acquisitions last year. Its most recent was of civil engineering and land surveying firm Summit Engineering Group (Heber City, UT). The firm added over 150 employees through acquisitions in Utah, Washington, Maryland and Florida in 2023 and climbed seven spots on the ENR Top 500.
  9. NV5 (Hollywood, FL) (ENR # 22) (NASDAQ: NVEE): Rounding out the top nine movers and shakers of 2023 is NV5. This publicly traded, leading provider of technology, conformity assessment, and consulting solutions for public- and private-sector clients supporting infrastructure, utility, and building assets and systems also announced five acquisitions last year with the largest being that of 340-employee Axim Geospatial (Sun Prairie, WI) in February. In 2023, NV5 added over 370 employees through acquisitions in Wisconsin, Florida, Illinois and Colorado. The firm rose two places on this year’s ENR Top 500 list.

Why the focus on employee count? The biggest challenge that our clients and the industry face headed into 2024 is finding and keeping good talent. (If you feel like you’ve been hearing this same story for over a decade, you’re not wrong.) Over 70% of the attendees already registered for our upcoming Southeast M&A and Business Symposium this March cite hiring and retention as their #1 business issue. However, these nine movers and shakers are cleverly using acquisitions to find talent (as well as open up new markets and geographies and shore up service capabilities). Between them, they added over 3,000 new employees through acquisitions last year. This is a testament to their human resources teams and systems.

As skilled acquirers, they are also improving their annual staff turnover rates. Our Excellence in Acquisitive Growth Awards research shows that skilled acquirers see voluntary turnover rates cut by almost one-fifth a year into their transactions. One reason for this is that these nine firms are creating more opportunities for the new employees post-transaction. Another is that these firms are bringing improved benefits to employees at a lower cost to them as individuals.

Just how good are these nine firms? These nine leading industry firms are not only really good at serving their clients and creating opportunities for their employees, they are also extraordinarily skilled at acquiring and integrating firms. One of the most remarkable features of these firms is the cadence of their acquisitions. To illustrate that point, prior to 2018, the most active acquirers in the industry each made an average of two (yes, two) acquisitions a year. Each of these nine firms is sourcing and on-boarding acquisitions at a markedly higher pace. It’s a testament to the competency of their M&A teams.

Morrissey Goodale is a CFE Media and Technology content partner.

Original content can be found at Morrissey Goodale.