In the minds of most architecture and engineering dealmakers, Florida is, by far, the most desired location for external expansion and acquisition goals. "Since 2001, we have witnessed over 40 transactions of Florida engineering, architecture, and environmental consulting firms, with another four announced in the first quarter of 2006 alone," said Steve Gido, CFA, a principal with ZweigWhite who specializes in financial advisory services. Prominent engineering and design firms such as ARCADIS (Highlands Ranch, Colo.), HNTB (Kansas City Mo.), Edwards and Kelcey (Morristown, N.J.), Tetra Tech (Pasadena, Calif.), and Boyle Engineering (Newport Beach, Calif.) have made significant purchases in Florida during this time.
Gido shares a few reasons why Florida had become a hot spot for mergers and acquisitions:
• Fast-growing state. An estimated 1,000 people are moving into the state every day, creating a huge demand for all types of residential, land development, institutional, commercial, environmental, and state and local infrastructure projects.
• Good economy. The state’s economy has diversified dramatically during the last 30 years, and its low tax environment and terrific climate have been a boon to new business creation.
• Difficulty opening branch office. Many firm leaders realize how expensive and frustrating opening a branch office in Florida can be with an out-of-town brand name and lack of marketing presence; it’s hard to develop relationships with school boards, architects, developers, municipalities, and the Florida Department of Transportation. The alternative is acquiring a Florida firm with a strong management team, dedicated staff, strong client base, and brand name in the markets they serve.