By Erin Edgemon – Staff Writer, Austin Business Journal
His title may have changed but Will Schnier, who many know as founder and CEO of Austin-based Big Red Dog Engineering, isn’t going anywhere anytime soon after his 9-year-old firm was acquired by Wantman Group Inc.
“We took equity as part of the deal,” he said. “Our leadership team intends to stay put and grow the new firm. We are all under 40 years of age. We have at least 25 years of this ahead of us.”
Schnier, who is now vice president in charge of Texas operations for Florida-based WGI, said the equity stake he and other Big Red Dog shareholders received shows they aren’t planning to jump ship. He said the companies were complementary, not competitors; both sides declined to reveal the financial details of the transaction.
Big Red Dog Chief Operating Officer Matt Stewart was also named a vice president at WGI.
“The name of the game in this business is growth, and you have to grow in order to create opportunities for people to advance in their careers,” Schnier said. “You’ve got to grow in order to do bigger projects for bigger clients. And, it’s very hard to do that organically given the tight labor market right now.”
In the deal that closed Jan. 1, Big Red Dog and its 110 employees in Austin, Dallas, Houston, San Antonio and Sugar Land became a division of WGI. Big Red Dog now makes up a quarter of WGI’s total operation, Schnier said.
Any new projects worked on by Big Red Dog outside of Texas will be under the WGI name while Big Red Dog’s name will change to WGI on Jan. 1, 2020.
Being acquired by WGI, which has 600 employees and annual revenue of $100 million, will allow Big Red Dog to grow its footprint, expand its range of services and bid for bigger projects. It will also help Big Red Dog continue to grow its revenue, which was at $18.5 million in 2018, according to the company.
Big Red Dog is a big player in Austin already.
The engineering firm is working on more than 50 mixed-use apartment complexes in Austin and doing traffic engineering for more than 30 clients. Big Red Dog is handling the mechanical, electrical and plumbing design for the renovations on the Omni Barton Creek Resort & Spa. It is the civil engineer on the Waller Creek revitalization project in downtown. It’s also one of the engineering firms on the high-rise planned on the site of the Hooters restaurant just south of Lady Bird Lake.
Unlike so many other offers that have come across Schnier’s desk in the last couple of years, he said the merger with WGI was a perfect fit.
It allows Big Red Dog to expand into Florida and other parts of the country including Michigan, Illinois, Indiana and North Carolina where WGI has offices. It also gives Big Red Dog greater inroads with government clients, since about 70 percent of WGI’s revenue is from public entities. For comparison, about 90 percent of Big Red Dog’s revenue comes from private companies.
The acquisition “is not some big behemoth swallowing up some little company and imposing their will,” he said. “They are looking at us because we do a lot of things right in taking care of our staff and our foray into the urban infill, downtown development market in all of the places we are located.”
The deal is beneficial to Big Red Dog employees, the vast majority of whom are millennials, Schnier said.
Attracting millennial employees is the “golden goose right now in engineering services,” he said, and the merger will help create more career opportunities for young employees.
The acquisition gives both Big Red Dog — the 22nd-largest engineering firm in Austin based on 2017 revenue and one of the largest headquartered here — and WGI the opportunity to expand the range of services it offers to private and public clients.
WGI offers services such as transportation engineering for public entities, subsurface utility engineering, land surveying and landscape architecture, which Big Red Dog doesn’t offer. On the flip side, Big Red Dog offers mechanical, electrical and plumbing services that WGI doesn’t provide.
Schnier said WGI will also get to capitalize on Big Red Dog’s vertical structural engineering and traffic engineering services.
At the same time, WGI was able to secure 110 professionals in the hottest markets in Texas, he said.
Big Red Dog is used to being courted
“We were certainly not looking to sell the firm, although we get approached regularly,” Schnier said. “For the last two or three years, we’ve been approached at least quarterly.”
Prospective buyers included private equity firms, strategic engineering firms and large publicly traded companies that would have paid more than WGI.
None of them were right, though, until WGI approached Big Red Dog about a year ago when Schnier’s firm started looking to expand in Florida as part of its 10-year business plan.
As part of that business plan, Big Red Dog wants to expand to highly educated and high-growth markets outside of Texas. They had identified markets in Florida, North Carolina and Colorado, Schnier said.
“We need stuff to be built for our business to work,” Schnier said. “That’s why we were attracted to markets like that.”
He said Florida was first on the list for its wide footprint and affluent population growth.
“When we started looking in Florida, (WGI) reached out to us and said, ‘Hey, we hear you are looking in Florida. Let’s have a conversation because we are looking in Texas,’” Schnier said. “For six months, it was really a get-to-know-you scenario. It didn’t get really serious until September or October of this year when we signed the letter of intent.”
In a statement, WGI’s CEO David Wantman said: “We were first introduced to the BRD team several years ago, carefully watching the growth and development of a hot firm in hot markets. Combining two great firms with such a broad range of services is certain to result in an exciting future.”
The acquisition will mean big things for Big Red Dog, Schnier said.
“We are going to use our footprint to build a combined firm,” he said. “Post-acquisition we will be at almost a $100 million in revenue with 60 percent of that coming from public clients, which is a huge deal and a huge objective for us. And from WGI’s perspective, they are able to get a significant toehold in the Texas market.”
Besides growing revenue, Schnier said Big Red Dog plans to add 20 to 30 employees in its Austin, Houston and Dallas offices over the course of the year. The company could also expand to Colorado in the “very near future,” he said.
In the coming months, Schnier hopes to continue to learn from David Wantman, who helms the company his father founded in 1972.
“There is no playbook for being a CEO,” Schnier said. “You learn it on the fly. You learn it from mentors and you learn to make good decisions by learning from your bad decisions.”
He said selling the company he founded in 2009 to WGI may be one of his best decisions.
What else does the future hold?
Schnier said he could see himself serving as a CEO again — next time for WGI.
“If it is the best thing for the company, I would welcome the opportunity. I’m not in there to climb the ladder right away. I’m in there to make sure we have a successful transition. I’ve lived my dream once. I’m looking forward to the next chapter.”