Civil and Environmental Engineering Firm (SOLD) - NEO Business Advisors
Case Study of Recent Transaction

Civil and Environmental Engineering Firm

SOLD - NEO Business Advisors represented a well-established civil, environmental, and municipal engineering firm that was an excellent opportunity for a strategic buyer looking to expand into a new geographic territory or for an individual buyer looking to break into business ownership in the field with an established company as a foundation for success. The business was well-known and had an excellent reputation for quality work generating a steady stream of business from repeat customers. Over 25 years of operations had built strong, long-standing relationships with many architects, contractors, construction managers, local, county, and state regulators, and local industrial and commercial companies.

Asking Price:  $695,000

Gross Revenue:  $1,073,915

SDE:  $281,829

FF&E:  $77,500     Included?  Yes

Inventory:  Nominal     Included?  Yes

Real Estate:  Leased     

Building Size:  3,000 SF 

Employees:  8 (including owner and spouse)

Established:  25+ Years

Location:  Ohio

Civil and Environmental Engineering Firm 1
Some Details of the Transaction Remain Confidential

Detailed Information

The business had seen consistent growth and profitability over the past 5 years and remained consistent and profitable during the COVID pandemic. The company was well staffed with highly skilled employees including multiple P.E. and P.S. licensed professionals to provide the range of services and expertise required for the wide variety of public and private civil engineering projects completed by the firm.

COVID-19 Impact Statement: The business operated as an essential business throughout COVID-19. Sales and profitability remained consistently strong.

Financial Overview:

Revenue by Year:

2022 - $1,071,078

2021 - $1,057,252

2020 - $1,115,754

3 Year Average Revenue - $1,073,915

Seller's Discretionary Earnings (SDE) by Year:

2022 - $312,984 (29.22%)

2021 - $242,963 (22.98%)

2020 - $266,096 (23.85%)

3 Year Average SDE - $281,829

Furniture, Fixtures, and Equipment (FF&E): FF&E was included in the asking price and included 9 work stations with AutoCAD and other specialty software, computers, desks, chairs, servers, full size plotter copier/printer, and a variety of support equipment.

Inventory and WIP: Inventory was included in the asking price but was nominal and included primarily office and miscellaneous supplies.

Civil and Environmental Engineering Firm 2
Civil and Environmental Engineering Firm 3

Real Estate: Real Estate was leased by the seller from a related party. The seller’s preference was to retain ownership of the real estate and execute a new lease on similar terms to the current lease arrangement with a buyer. The leased space was approximately 3,000 SF of office and storage space.

Growth and Expansion: The business was an excellent strategic acquisition opportunity for an existing company looking to expand into a new geographic territory or to grow their presence in the current market. The opportunity would add a wealth of talent to the acquiring organization while also allowing the company to grow by being a part of a larger firm with more infrastructure and resources. The business was driven primarily by word of mouth, referral, and repeat business creating ample growth opportunity for someone to develop and implement a strategic marketing plan. Adding more staff or acquiring and merging with another smaller firm would increase the capacity to take on more work, realize better economies of scale, and improve operational efficient, while reducing overhead costs associated with operating a small, professional firm.

Reason for Selling: The owner was selling to retire from the field and pursue interests in other industries while spending more time with family. The owner felt strongly the business was positioned well for an strategic industry or individual buyer to take it to the next level.

Support & Training: The owner was willing to stay on for a reasonable time after a sale to ensure a smooth transition of the business operations and customer relationships. Four weeks transition training was included in the asking price and the seller was negotiable for staying on up to one year for additional transition support with mutually agreeable, market rate hourly compensation.

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