INDUSTRY UPDATE | Q3 2024

Architecture, Engineering & Construction

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Key Trends in AEC | M&A Activity | Market Multiples | Macroeconomic Update

CCA’s AEC Practice Leadership

Service Areas

Architecture

Design
Planning
Landscape

Engineering

Transportation
Infrastructure
Utilities
CI/CM
MEP
Design/Build
Government

Construction

General Contracting
Infrastructure Svcs
Electrical
Concrete
Mechanical
Civil/Demolition

Contact Us

Charlie Maskell

Managing Director

cmaskell@ccabalt.com
443.842.7456

B.S. Loyola University
Certified Public Accountant
30+ years of M&A Experience

Tim Brasel

Managing Director

tbrasel@ccabalt.com
302.388.8513

B.S. Salisbury University
MBA University of Maryland
10+ years of M&A Experience

Deep Experience Advising AEC Clients

Sell-Side M&A Experience

SoftTech Solutions, Inc. was acquired by Synergy ECP, backed by Falfurrias Capital.

Robert H Vogel Engineering acquired by Timmons Group

Select Corporate Advisory Clients

Key Trends Impacting the AEC Sector

There are several key themes driving growth and M&A activity in the Engineering sector…

Key trends:

Enhanced competitiveness for skilled and experienced talent
Aggressive investment in green tech and renewable energy
Exploding demand for data centers
Growing public private partnerships providing scale and funding
Increasing infrastructure funding by federal and state governments
Mushrooming interest from private equity attracted by stable cash flows and long-term contracts
Expanding need for the modernization of transportation networks
Increased safety and environmental regulations for water and wastewater

“Overall, M&A activity in the engineering sector is shaped by the need for companies to adapt to changing market conditions, technological advancements, and social expectations related to sustainability, environment and resilience. As these trends continue for the indefinite future, we anticipate investment, consolidation and M&A activity in the engineering sector to continue to outpace most other mature sectors. A transaction, completed in August, which is a perfect example of these trends is the merger of Gannett Flemming and TranSystems to become a $1.3B revenue engineering firm. “

– Charlie Maskell, Managing Partner

Supporting news and insights from around the AEC Industry…

According to the American Council of Engineering Companies (ACEC) Research Institute’s Engineering Business Sentiment 2024 Q3, 89% of firms have at least one job opening, with the median number of open positions sitting a five. However, engineering firms with 25 or fewer FTEs have a higher percentage of openings (16%).

Multiple large-scale data developments occurred in in Q3 2024 including, Meta unveiling plans for a $800M, 715k sq ft hyperscale data center campus in Cheyenne, Wyoming and DataBank breaking ground on a 70k sq ft “HPC-ready” data center, its third in Ashburn, VA, marking continued data center development in Northern Virginia.

In early September, WSP Global released a white paper on the Digitalization of Road Transport Infrastructure. The document describes the integration of intelligent applications, co-operative and automated vehicles, and infrastructure communication systems. Thus, highlighting how key focus areas, such as AI and infrastructure development can be blended together.

“This merger [Gannett Flemming and TranSystems] bolsters our position within bridges, highways, construction services, mass transit & rail, and program management and provides our customers with an end-to-end solution across multiple modes of transportation.”

– Bob Scaer, Gannett Fleming Chief Executive Officer

2024 Transaction Headlines

Verdantas Acquires Aegis Environmental

acquired

September 2024

Commentary

Aegis provides environmental health & safety, regulatory compliance, and sustainability consulting services across the power, renewable energy, and industrial sectors.
This acquisition broadens Verdantas’ geographic footprint and nearly doubles the combined company’s environmental health and safety and sustainability advisory team.
Press Release

Legence Acquires AMA Group

acquired

August 2024

Commentary

AMA Group is a national provider of innovative engineering services, including an expertise in the design and construction management of media and production facilities.
Following the transaction, Legence will integrate AMA Group into CMTA, Legence’s largest mechanical, electrical, and plumbing (MEP) engineering services portfolio company.
Press Release

Gannett Fleming Acquires TranSytems

acquired

August 2024

Commentary

TranSystems is a provider of transportation-focused engineering and infrastructure services.
This acquisition, viewed as a strategic merger, creates a combine entity with over $1.3B in revenue and over 5,000 employees. TranSystems’ transportation focus bolsters Gannett Fleming’s infrastructure service verticals.
Press Release

Quanta Services Acquires Cupertino Electric

acquired

July 2024

Commentary

Cupertino Electric, Inc. (CEI) provides integrated electrical infrastructure solutions to the technology, renewable energy, infrastructure, and commercial industries.
The acquisition of CEI promotes Quanta’s strategic focus on providing an end-to-end electrical infrastructure solution between utilities and large power consumers.
Press Release

Verdantas Acquires Aegis Environmental

acquired

September 2024

Commentary

Aegis provides environmental health & safety, regulatory compliance, and sustainability consulting services across the power, renewable energy, and industrial sectors.
This acquisition broadens Verdantas’ geographic footprint and nearly doubles the combined company’s environmental health and safety and sustainability advisory team.
Press Release

Legence Acquires AMA Group

acquired

August 2024

Commentary

AMA Group is a national provider of innovative engineering services, including an expertise in the design and construction management of media and production facilities.
Following the transaction, Legence will integrate AMA Group into CMTA, Legence’s largest mechanical, electrical, and plumbing (MEP) engineering services portfolio company.
Press Release

Gannett Fleming Acquires TranSytems

acquired

August 2024

Commentary

TranSystems is a provider of transportation-focused engineering and infrastructure services.
This acquisition, viewed as a strategic merger, creates a combine entity with over $1.3B in revenue and over 5,000 employees. TranSystems’ transportation focus bolsters Gannett Fleming’s infrastructure service verticals.
Press Release

Quanta Services Acquires Cupertino Electric

acquired

July 2024

Commentary

Cupertino Electric, Inc. (CEI) provides integrated electrical infrastructure solutions to the technology, renewable energy, infrastructure, and commercial industries.
The acquisition of CEI promotes Quanta’s strategic focus on providing an end-to-end electrical infrastructure solution between utilities and large power consumers.
Press Release

2024 Transaction Highlights

Q3 2024

Date	Target	Acquiror	Target Business Description	TEV
9/10/2024			John G. Walton Construction Company, Inc. offers highway and heavy construction services. The company was founded in 1994 and is based in Mobile, Alabama.	N/A
9/4/2024			ArchKey Solutions LLC offers electrical and instrumentation construction solutions such as, preconstruction, design-build and design-assist engineering The company was founded in 2018 and is based in Saint Louis, Missouri with additional offices across the U.S.	N/A
9/3/2024			Johnson Engineering, LLC provides construction engineering and inspection services. The company was founded in 1946 and is based in Fort Myers, Florida.	N/A
8/12/2024			Power Technical Services, Inc. provides engineering, consulting, project management, and maintenance testing services. The company was founded in 2001 and is based in Downers Grove, Illinois.	N/A
8/12/2024			POWER Engineers, Inc. offers integrated engineering solutions across various end markets including, power delivery and generation, and facilities. POWER Engineers, Inc. was incorporated in 1976 and is based in Hailey, Idaho with locations in USA and Canada	$1,780
8/1/2024			Maxima Power Group, Inc. provides technical field services and electrical engineering for power and control systems. The company was founded in 1982 and is based in Denver, Colorado.	N/A
7/1/2024			Stratus Team LLC provides engineering and architecture consulting services with a focus on the southeastern region of the U.S. The company was incorporated in 2022 and is based in Coraopolis, Pennsylvania.	N/A

Public Company Valuation Multiples

CCA tracks publicly traded companies in across multiple AEC sub-sectors:

Engineering & Professional Services

Providers of professional technical engineering, project management, and consulting solutions.

Diversified Industrial Services

Providers of a suite of engineering and construction services focused on industrial and utilities end-markets.

Construction Services

Providers of construction and development services for across multiple end-markets, such as transportation, industrial, and power.

CCA AEC Sector Index Performance

Market Commentary

The Construction Services sector continued to outperformed the other sector indexes CCA tracks as well as the S&P 500 through the third quarter of 2024. Sustained strong performance is supported by large public infrastructure projects and construction needs across the Healthcare, Data Center, Manufacturing, and Life Sciences industries.
Diversified Industrials Services companies saw strong growth as a result of an increased focus on utility projects, specifically related to power generation and power delivery across electrical grids.
Engineering & Professional Services firms anticipate persistent challenges relating to higher staffing costs, while lower interest rates bring optimism for various commercial projects to start up after being delayed due to previously higher interest rates.

AEC Public Company Market Data

Engineering & Professional Services

Providers of professional technical engineering, project management, and consulting solutions.

Diversified Industrial Services

Providers of a suite of engineering and construction services focused on industrial and utilities end-markets.

Construction Services

Providers of construction and development services for across multiple end-markets, such as transportation, industrial, and power.

Source: S&P Capital IQ Data as of 9/30/2024

Select AEC Transactions

Q2 2024

($ in millions)

Announced Date	Target	Acquiror	TEV	EBITDA	TEV/ EBITDA	Target Business Description
9/16/2024	Propel Engineering, Inc.	Traffic & Mobility Consultants LLC	N/A	N/A	$ –	Propel Engineering, Inc. operates as a civil engineering company that provides consulting services for highway, traffic, structural, civil, and land development, water resource, and environmental engineering for both public and private clients. The company was incorporated in 2013 and is based in West Palm Beach, Florida.
9/10/2024	John G. Walton Construction Company, Inc.	Construction Partners, Inc.	N/A	N/A	–	John G. Walton Construction Company, Inc. offers highway and heavy construction services. The company constructs roads, drainages, schools, universities, industrial and commercial buildings, and airports. John G. Walton Construction Company, Inc. was founded in 1994 and is based in Mobile, Alabama.
9/9/2024	Patriot Industries LLC	Rigid Constructors, LLC	N/A	N/A	–	Patriot Industries LLC provides heavy civil and concrete construction services.Patriot Industries is a construction and engineering company. The company was incorporated in 2012 and is based in Baton Rouge, Louisiana. As of September 9, 2024, Patriot Industries LLC operates as a subsidiary of Rigid Constructors, LLC.
9/9/2024	Precision Survey and Mapping, LLC	Verdantas LLC	N/A	N/A	–	Precision Survey and Mapping, LLC provides surveying, mapping, and engineering services including Property Surveys, Site and Permit Plan Preparation, Topographic and As-Built Surveys, and ALTA/NSPS Land Title Surveys. The company was founded in 2011 and is headquartered in Middle River, Maryland.
9/4/2024	Emerald Coast Striping, L.L.C.	Frontline Road Safety LLC	N/A	N/A	–	Emerald Coast Striping, L.L.C. operates as a construction and engineering company. The company was incorporated in 2007 and is based in Panama City, Florida. As per the transaction announced on August 2, 2024, Emerald Coast Striping, L.L.C. operates as a sub
9/4/2024	ArchKey Solutions LLC	26North Partners LP	N/A	N/A	–	ArchKey Solutions LLC offers electrical and instrumentation construction solutions. The company offers solutions, such as electrical construction solutions, including preconstruction, design-build and design-assist engineering, and off-site construction. The company was founded in 2018 and is based in Saint Louis, Missouri.
9/3/2024	Johnson Engineering, LLC	Apex Companies, LLC	N/A	N/A	–	Johnson Engineering, LLC provides construction engineering and inspection services. The company was founded in 1946 and is based in Fort Myers, Florida.
9/3/2024	Volatus Infrastructure, LLC	eVertiSKY Corp.	N/A	N/A	–	Volatus Infrastructure, LLC engages in building aviation landing infrastructure and charging stations for electric mobility. The company was founded in 2021 and is based in Neenah, Wisconsin.
9/2/2024	Northern Engineering & Consulting, Inc.	IMEG Corp.	N/A	N/A	–	Northern Engineering & Consulting, Inc. operates as a civil engineering firm that provide services related to infrastructure development and planning. The company was founded in 1997 and is based in Bemidji, Minnesota.
8/20/2024	Peoples & Quigley Inc.	DCCM, LLC	N/A	N/A	–	Peoples & Quigley Inc. provides water resources and wastewater engineering services. The company was founded in 1976 and is based in Sandy Springs, Georgia.
8/18/2024	Clohessy, Harris, and Kaiser LLC	DCAK-MSA Architecture & Engineering, PC	N/A	N/A	–	Clohessy, Harris, and Kaiser LLC operates as a architectural firm that provides architectural design, interior design, and facilities planning services to the aerospace industry. The company was founded in 1987 and is based in Simsbury, Connecticut.
8/16/2024	M.H. Williams Construction Group, Inc.	Landry/French Construction Co. Inc.	N/A	N/A	–	MH Williams Construction Group, Inc. operates as a construction company that offers construction management, design-build, and general contracting services. The company was founded in 1987 and is based in Melbourne, Florida.
8/15/2024	Cbec, Inc.	Verdantas LLC	N/A	N/A	–	Cbec Eco Engineering, LLP provides water resource engineering services. Cbec Eco Engineering, LLP was formerly known as Cbec, Inc. and changed its name to Cbec Eco Engineering, LLP in July 2024. The company was founded in 2007 and is based in West Sacramento, California.
8/14/2024	AMA Group	Legence Holdings LLC	N/A	N/A	–	AMA Group operates as an engineering firm. The company was founded in 2000 and is headquartered in New York, New York.
8/12/2024	Barghausen Consulting Engineers, Inc.	Corestates Construction Services, Inc.	N/A	N/A	–	Barghausen Consulting Engineers, LLC provides civil engineering, land use planning and surveying services for land development projects. The company was incorporated in 1982 and is based in Kent, Washington.
8/12/2024	POWER Engineers, Incorporated	WSP Global Inc.	1,780.00	98.90	18.00	POWER Engineers, Incorporated operates as a global consulting engineering company that offers consulting and engineering design services for power delivery and generation, environmental, and municipal markets. POWER Engineers, Incorporated was incorporated in 1976 and is based in Hailey, Idaho.
8/12/2024	Power Technical Services, Inc.	RESA Power, LLC	N/A	N/A	–	Power Technical Services, Inc. provided engineering, consulting, project management, startup, commissioning, and maintenance testing services. The company was founded in 2001 and is based in Downers Grove, Illinois.
8/7/2024	Element 82 LLC	Crown Electrokinetics Corp.	N/A	N/A	–	Element 82 LLC operates as a utility services company focused on supporting water utilities efforts to meet EPA compliance requirements to inventory all unknown water service materials within their system. The company was incorporated in 2024 and is based in Orlando, Florida.
8/5/2024	TranSystems Corporation	Gannett Fleming, Inc.	N/A	N/A	–	TranSystems Corporation, an engineering and consulting company, provides architectural planning, design, and construction solutions to transportation infrastructure challenges. The company was incorporated in 1966 and is based in Kansas City, Missouri with additional offices in the United States.
8/1/2024	Elite Surface Infrastructure	Bow River Asset Management LLC	N/A	N/A	–	Elite Surface Infrastructure LLC, a civil construction company, provides civil construction, asphalt and concrete maintenance services, as well as underground utilities services. Elite Surface Infrastructure LLC was founded in 1998 and is based in Englewood, Colorado.
8/1/2024	Maxima Power Group, Inc.	Sunbelt Solomon Services, LLC	N/A	N/A	–	Maxima Power Group, Inc. provides NETA-certified technical field services and electrical engineering for power and control systems. The company was founded in 1982 and is based in Denver, Colorado. It has an additional office in Tipp City, Ohio.
8/1/2024	Maxima Power Group, Inc.	Sunbelt Solomon Services, LLC	N/A	N/A	–	Maxima Power Group, Inc. provides NETA-certified technical field services and electrical engineering for power and control systems. The company was founded in 1982 and is based in Denver, Colorado.
7/22/2024	Brown & Kysar, Inc.	Vantage Point Solutions, Inc.	N/A	N/A	–	IKB ENTERPRISES, INC. engages in the providing engineering, planning, and operational services for public utilities. The company was founded in 1985 and is based in Battle Ground, Washington.
7/19/2024	Environmental Building Solutions, LLC	Pinchin Ltd.	N/A	N/A	–	Environmental Building Solutions, LLC offers environmental consulting and engineering services. Environmental Building Solutions, LLC was incorporated in 2005 and is based in New York, New York.
7/17/2024	Cupertino Electric, Inc.	Quanta Services, Inc.	1,705.00	155.81	10.94	Cupertino Electric, Inc. provides electrical engineering and construction services, which include engineering and building information modeling, procurement, pre- fabrication, construction, maintenance, and operations. The company was founded in 1954 and is based in San Jose, California.
7/17/2024	Grantham & Associates, Inc.	LJB Inc.	N/A	N/A	–	Grantham & Associates, Inc. operates as a civil engineering and surveying company. The company was founded in 2002 and is based in Garland, Texas.
7/11/2024	Element Engineering, LLC	Bowman Consulting Group Ltd.	N/A	N/A	–	Element Engineering, LLC provides tailored civil, water, and wastewater engineering services to rural communities. The company was incorporated in 2014 and is headquartered in Lakewood, Colorado.
7/8/2024	Interface Consulting International, Inc.	B. Riley Advisory Services	N/A	N/A	–	Interface Consulting International, Inc. engineering and construction consulting services. The company was incorporated in 1986 and is based in Houston, Texas. As of July 8, 2024, Interface Consulting International, Inc. operates as a subsidiary of B. Riley Advisory Services.
7/8/2024	RIM Architects, LLC	GHD Group Limited	N/A	N/A	–	RIM Architects, LLC provides architectural and design services. It offers general, LEED/sustainable design, building forensics, climate design, building information modeling, conceptual rendering, and graphic design/signage services. The company was founded in 1986 and is based in Anchorage, Alaska.
7/1/2024	Stratus Team LLC	Brightstar Capital Partners, L.P.	N/A	N/A	–	Stratus Team LLC operates as a engineering and architecture consulting firm for the full project lifecycle from initial planning and feasibility studies to final construction oversight. The company was incorporated in 2022 and is based in Coraopolis, Pennsylvania.

Select Macroeconomic Indicators

Real GDP

Consumer Spending – PCE Price Index

Total Nonfarm Payrolls

Unemployment Rate

Real GDP

Consumer Spending – PCE Price Index

Total Nonfarm Payrolls

Unemployment Rate

CCA’s Investment Banking Team

Client Success
Employee Happiness
Continuous Improvement
Fiscal Responsibility
Community Well-being

CCA’s Investment Banking team is a seasoned team dedicated to its clients’ outcomes. We have worked with dozens of companies in projects ranging from Sell-side Investment Banking, to Ownership Alternatives, to Valuations to Boards of Directors. CCA partners with its clients, shepherding them throughout the process, and supporting them to reach their goals.

Charlie Maskell

Managing Partner

Charlie leads the CCA teams dedicated in assisting businesses enhance shareholder value and position themselves to sell to a strategic buyer, recapitalize with a private equity investor transition through an internal transaction.

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Tim Brasel

Managing Director

Tim leads the day-to-day management and execution of many of the deals CCA transacts for its clients. He’s helped lead and guide the sale and acquisition of numerous middle market companies. Learn more:

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Martin O'Neill

Managing Director

CCA clients appreciate that Marty has walked a mile in their shoes, having spent 30 years as a business leader in companies of various industries and sizes before joining CCA as an advisor to middle market businesses. Learn more:

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Stuart Knott

Managing Director

Stuart recognizes that for most business owners, selling the company they have built is one of their most important life decisions. He brings a unique and valued perspective based on 20 years’ experience in the middle market.

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Andy Spears

Vice President

From assisting high-growth market leaders through sale processes to advising companies struggling with cash flow issues, Andy has helped a breadth of companies realize their strategic goals for more than a decade.

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Katie Kieran

Vice President

Katie has advised many middle market business owners on how to create value and optimize the outcome when they’re ready to sell, drawing on her strong analytics, strategic, and financial modeling skills. Learn more:

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Kevin Afriyie

Associate

Kevin’s proficiency in technical skills is evident as he conducts financial analyses and modeling, carries out industry research, and identifies potential investors, buyers, acquisition targets, and merger partners.

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Aidan Olmstead

Senior Analyst

An expert in financial modeling, accounting, and business research, Aidan is responsible for preparing financial projections, business valuations, investment memoranda, and marketing materials for clients.

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Miles Gally

Analyst

Miles supports our senior-level investment banking staff in preparing the financial projections and business valuations that are essential to a successful deal execution and a strong outcome.

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