Dear Insider,

It can be dazzling. Years of hard work summed up in a number. For many firm owners, the topline sale price is the first and only number that grabs attention. But in the AEC world, that figure only tells part of the story. The true value of a transaction lies in its structure, its alignment with your goals, and the future it creates for your people.

A Wide Range of Buyers, a Wide Range of Outcomes

The AEC M&A landscape is far more diverse than it appears at first glance. On one end of the spectrum are strategic acquirers, firms that want to expand their geographic footprint or add new technical disciplines. Many of these buyers aim to preserve your firm’s name (for a period), culture, and leadership, integrating operations gradually while maintaining continuity for your clients and staff.

On the other end are private equity-backed platforms and private equity buyers, who often look to create a larger network of aligned firms under a shared brand or financial structure. These deals may involve the opportunity to roll equity into the acquiring platform, letting you participate in the upside as the combined organization grows. For sellers who believe in their market’s long-term potential, this structure can yield substantial wealth creation well after the closing date.

Between those two poles lie hybrid models, employee ownership transitions, and partial recapitalizations, each with unique implications for control, governance, and future value.

Where your people end up is more than just sentiment. If done right, an M&A transaction can be a stepping stone for your people into a truly great organization. Their success begins at the negotiating table. 
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More Than Just the Topline Number

A sale price headline doesn’t tell you how much you’ll actually receive, when you’ll receive it, or how much risk you’re taking on to get there. A deal might advertise an “8× EBITDA” valuation, but the structure of that offer determines how it translates into real proceeds.
A sophisticated seller understands how each of the following elements affects their outcome:
●    Cash: Immediate liquidity at closing, 
●    Promissory Note (Seller Note): A portion of the price paid over time, effectively a loan to the buyer. Adds credit risk, but can be a bridge to a higher total valuation.

●    Equity Rollover: Shares in the buyer or parent company that let you benefit from future growth. Excellent for those who want to stay engaged and believe in the combined vision. This is an option available in both strategics and private equity buyers.

●    Earnout: Contingent payments usually tied EBITDA or revenue targets. These can also help bridge a valuation gap if you have a buyer that might be wary of your recent growth and its future viability. It may introduce uncertainty if post-closing integration doesn’t go smoothly, and some buyers try to avoid the use of earnouts altogether due to it being a sort of barrier to integration (i.e. separate books during the earnout period).

Each lever shifts not only the financial result but also your ongoing role, your firm’s autonomy, and your tax consequences. A “higher” offer that’s mostly earnout or equity may be less valuable in the long run than a slightly lower offer with stronger guarantees and cultural alignment.
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Defining Success on Your Own Terms

The key to a successful M&A process is defining your goals early and building a strategy to achieve them.
Do you want to protect your firm’s name and legacy? Maximize your personal liquidity? Stay on for the next growth phase? Create ownership opportunities for your key people? Each of these objectives points toward a different type of buyer and deal structure.

Working with an experienced M&A advisor who understands the AEC landscape helps you not just achieve a great topline number but also look beyond it. The right advisor can model alternative structures, negotiate terms that align incentives, and ensure that your deal accomplishes what truly matters, to you, your team, and your legacy.

Are you ready? PSMJ’s M&A Advisory and Ownership Transition practice has helped thousands of AEC firm owners find, structure, and execute their M&A and Ownership strategies with lasting results. Whether you’re looking to expand your firm with an acquisition, plan your exit strategy via internal or external sale, our bespoke approach is built around you and your goals. PSMJ’s award-winning team of experts is here for you every step of the way.

Learn more about PSMJ’s M&A advisory services here.