Merger/Acquisition Services and Opportunities
Services
The Coxe Group has assisted clients in establishing affiliations since its inception. With the continuing growth in the size of our client base, so too has grown our network and database relative to affiliations, mergers, and acquisitions. Mergers and acquisition activity in all business sectors has been robust in recent years, but unfortunately, not all marriages are made in heaven. We help firms that should avoid getting on that bandwagon from staying on it very long.We refer to "affiliations" as relationships between firms in which there is no change or exchange of ownership. Situations in which there are changes in ownership status fall into two categories. "Acquisitions" occur when a firm buys part or all of the ownership of another firm, resulting in some or complete reduction of ownership-related control in the acquired firm. "Mergers" result when two or more firms combine their equity to form a larger entity in which there is a larger ownership base.
Our merger and acquisition work covers many facets.
1. Growth strategy. We have assisted many firms in developing strategies for growth, and in some of those, growth through affiliation, merger, or acquisition was the preferred approach.
With other firms, a merger or acquisition strategy was determined to be the most effective means of acceleration entry into new market sectors, at times defined geographically, by client type, by project type, and/or by discipline and service.
In some situations, the strategy responded less to growth and marketing goals and more to an inability to effect internal transition of leadership and ownership. In still other situations, a merger or acquisition strategy resulted from owners' ambitions to receive higher value more quickly than seemed realistic in an internal sale.
2. Affiliation searches. We assist in identifying firms between whom a relationship will increase marketing and service strength for specific projects and clients.
3. Acquisition and merger searches. We undertake searches on behalf of clients seeking firms to acquire or with whom to merge. Often the vehicle of merger or acquisition is not defined at the inception. Instead the search process identifies suitable candidates, with the decision of whether a merger or an acquisition will be most suitable evolving during discussions - which we often facilitate - between the firms.
4. Acquirer searches. We identify candidate firms to acquire clients. At times we help our clients to explore things internally that they can do to strengthen their practices and increase their appeal, and their value, to an acquirer.
5. Integration assistance. We assist firms, whether or not we had been part of the process that got them together, to come together smoothly and toward common goals. The range of issues covered can be wide, including cultural integration, compensation planning, technology integration, project process improvement, organizational management, and public relations strategy development.
6. Valuation. We assist buyers, sellers, and merger partners develop objective valuations of their practices. Frequently, valuations vary depending on the conditions of ownership transfer - values in external sales are generally considerably higher than values in internal sales - and we help our clients realize and understand this.
7. Deal structuring. We assist buyers, sellers, and merger partners structure deals that are fair, consistent with collective goals, and prudent with respect to taxes. In the course of such services, we may work with our clients' attorneys and accountants.
8. Due diligence. We undertake due diligence or guide our clients as they undertake it themselves to ascertain that "what you see is what you get". Through our due diligence efforts, we investigate such things as the financial profile including project specific as well as firm-wide levels, marketplace reputation, roles and capabilities of personnel, current ownership situation, employment agreements, and liability issues.
Our due diligence can take on a non-conventional flavor as well. For example, we may look at a potential acquisition not just itself, but also in the context of its potential fit with the acquiring firm. On this basis, we have helped some clients avoid marriages that would have had a very high likelihood of falling significantly short of goals.
Opportunities
We are currently assisting the following firms who are interested in being acquired or acquiring another firm:
- Architectural firm located in the Northwest
- Architectural firm located in Southern California
- Environmental Consulting Firm located in the Northwest
- Interior Design firm located in Southern California
- Interior Design and Purchasing firm located in the Southeast
in the Northwest
An eight-person Seattle-based architecture firm, whose principals see long careers ahead, seeks a firm from outside the region with strengths in the higher education and civic markets to merge with or acquire the practice. The goal is to create a stronger presence to capitalize on the firm's existing marketplace, network, and reputation.
For additional information, please call Hugh Hochberg at 206/467-4040, or send an e-mail message to:
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in Southern California
A wonderful opportunity exists for a buyer who wants to enter or expand in the very strong California K-12 marketplace, while also taking on clients and projects in the golf arena. The firm's two partners have grown the practice to 35 people in three offices, currently serving over 25 school districts. The firm has a solid backlog and well over a year's worth of unsigned commitments. The State of California has committed $55 billion for school capital expenses, in addition to local funding, indicating that the K-12 market will continue to be very strong. Through personal relationships and networks, the firm also designs golf facilities. The partners will continue in the firm, and seek a buyer who will infuse management skills, thereby allowing them to do what they do best: marketing, client relations, and design.
For additional information, please call Hugh Hochberg at 206/467-4040, or send an e-mail message to:
in the Northwest
Background
This environmental firm has been in business for 25 years and owned by the current owners for 15 years. The firm has approximately 70 staff in three Northwest cities. The revenues for the past three years have ranged from $4.2 - $4.8 million. The firm's current backlog is about $6 million. The current owners are in their forties and are active as rainmakers, managers, and technical experts. They are seeking a larger organization to acquire their firm to relieve them of some of the firm management activities and responsibilities. They do wish to remain active in the firm after the acquisition.
Major Fields of Practice
Environmental Compliance: Environmental documentation, including NEPA, SEPA, and CEQA; federal, state, and local environmental permitting and regulatory assistance; and environmental site assessments.
Urban and Regional Planning: Transportation planning; growth management studies; development and redevelopment studies; site planning and design; visual quality assessment; noise and air quality modeling and monitoring.
Natural Resources: Watershed analysis and restoration plans; water resources analyses; fisheries and aquatic resources studies; wildlife inventories and habitat assessments; endangered species; wetlands delineation, inventory, creation, and mitigation planning; rare, threatened, and endangered species evaluations and biological assessments; stormwater engineering and design.
Types of Major Clients
Over the past few years the ratio of public and private clients has ranged from 40:60 to 60:40 depending on the year.
Example of Public Clients
Cities; counties; federal and state agencies, including FHWA, FAA, FTA, WSDOT, ODOT, IDOT, MDOT, U.S. Army Corps of Engineers, U.S. Navy, BPA, ODSL, WADOE, and BLM.
Example of Private Clients
Residential, commercial, industrial, and office developers, including Costco; Trammel Crow, Boeing, NIKE, Hyundai, Boise Cascade, Levi Strauss Co., Weyerhauser, and Home Depot; marine facilities developers; architectural and engineering firms; private utilities; and law firms.
For additional information, please call Gordon Culp at 206/467-4040, extension 263 or via e-mail message to:
hhochberg@coxegroup.com
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Financial performance: At or near industry average. Adequate to fund active marketing program, competitive compensation and re-investment in the firm.
Ownership: Two shareholders.
Staff: Seventeen people operating in a single office location.
Reason for selling: The firm's leaders want to effect a gradual reduction of involvement in the firm.
Types of work: Corporate and institutional interior design.
Clients: Primarily private sector clients in the United States.
Image and reputation: High quality work and service. Highly professional and ethical. Fiscally conservative. Marketing- and project-oriented leadership.
For additional information, please call Hugh Hochberg at 206/467-4040, extension 202 or via e-mail message to:
hhochberg@coxegroup.com
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An interior design and purchasing firm of 32 people specializing in interior design and furnishing of country clubs, hotels, and high-end residences has a noteworthy client base, a wide geographic reach, and a highly successful, efficient purchasing component. Its founders/owners are interested in selling the firm. The firm generates about $10 million in revenue, of which about $8.5 million is in the purchasing component and the balance is design fees. The right buyer will likely continue the existing services with current clients and markets, and may well bring the firm's capabilities to new markets. The strong staff deals with all aspects of project delivery and client management, minimizing the requirement for a buyer to add new management and leadership.
For additional information, please call Hugh Hochberg at 206/467-4040, extension 202 or via e-mail message to:
hhochberg@coxegroup.com
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