Not long ago, the idea of an AEC firm partnering with private equity carried a stigma: a sign of cashing out rather than building for the future. That narrative is rapidly changing. Today, nearly half of all AEC M&A deals involve some form of private equity, and the results, when done right, can be transformational.
No story illustrates this better than Pape-Dawson Engineers and their partnership with Palm Beach Capital.
From $200M to $545M: How Pape-Dawson Dreamed Big
Pape-Dawson is a 60-year-old Texas-based engineering firm with deep roots and a proud history—SeaWorld San Antonio, Fiesta Texas, a Toyota manufacturing plant—and a track record of growth across the state. But when the third generation of Dawson family leadership began thinking about the future, chairman Gene Dawson recognized that the firm needed to think differently about equity, liquidity, and long-term sustainability.
"We were at the first PSMJ conference in 1984," Dawson said. "We were making over $200 million in revenue, but the leaders had to start thinking about building more equity and value."
After being outbid on acquisition targets by PE-backed competitors, Pape-Dawson asked a pivotal question: "Why can't we be the platform?"
Finding the Right Private Equity Partner
In 2021, Pape-Dawson was approached by a PE-backed company—but the deal didn't feel right. They kept looking, and in Palm Beach Capital, they found something rare: a firm with only 11 employees, a focused investment philosophy, and immediate chemistry with the Pape-Dawson leadership team.
The structure of the deal was equally important. Palm Beach Capital's investment allowed Pape-Dawson's management team to realize a meaningful liquidity event while retaining operational control and significant equity in the business. They closed in March 2023.
The results have been remarkable:
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Revenue grew 175%, from $200M to $545M
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10 acquisitions completed, including 4 in 2024
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Offices expanded from 8 (in one state) to 35 offices across 7 states
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Headcount grew from 850 to 2,100 employees
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Voluntary turnover dropped from 11% to just above 8%
7 Keys to Making an AEC Private Equity Partnership Work
1. Take your time.
"It's not a sprint," Dawson said. Pape-Dawson spent months building an intentional value creation plan before moving forward. Rushing the process is one of the most common and costly mistakes in AEC M&A.
2. Listen to new ideas.
"Great ideas are also coming from the leadership of the acquired companies," Dawson noted. A PE partnership should open your firm up to new perspectives, not close it off.
3. Build a strong management team.
Palm Beach Capital's Brian Kirkpatrick looks for "a solid management team with the runway to continue to build the business, a strong entrepreneurial spirit, robust relationships, and a desire to win." Without a capable team, even the best deal structure won't deliver.
4. Examine culture closely in every acquisition.
"The most important thing is the fit and future for the employees," said PSMJ senior consultant Karl Wohler. "If you don't have a great culture fit, the employees aren't going to stay on, and the transition's not going to be successful."
5. Consider working with an M&A advisor.
An experienced advisor builds a customized target list, manages the meeting process, validates culture alignment, and ensures the economics work. "The offers can be all over the map," Wohler noted. Having a knowledgeable advocate in your corner is invaluable.
6. Know what deal structure you're after—and wait for it.
Pape-Dawson retaining a majority share was unusual, but it was precisely what they needed. Don't accept a deal that doesn't match your goals just because it's on the table.
7. Prioritize integration.
"Integration is huge," Dawson said. Pape-Dawson has been intentional about in-person meetings, overlaying benefits and health care with acquired firms, and fostering organizational energy across the combined entity. "We haven't had to cut one person in our growth."
The Future of Private Equity in AEC
Kirkpatrick estimates there are now approximately 200 private equity firms involved in the AEC space, and that by the end of 2025, roughly 40% of top AEC firms will have some form of PE investment. For firm leaders weighing their options, the Pape-Dawson story is proof that the right PE partnership—built on shared culture, aligned goals, and mutual trust—isn't the end of your firm's story. It's the beginning of a much bigger one.
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