MERGERMARKET: Wantman Group in Talks with Multiple Targets, Executive Says (January 2017) | WGI

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MERGERMARKET: WANTMAN GROUP SEEKS BUYS; FLORIDA, TEXAS AMONG AREAS OF INTEREST


January 2017

Wantman Group Inc. (WGI), a privately held engineering consulting firm based in West Palm Beach, Florida, is actively evaluating four acquisition opportunities, said President David Wantman.

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The targets range in revenue from USD 1m-USD 8m, according to Wantman. The company is in various stages of discussions and is “very close” to closing a deal with a multi-state firm, he noted.

Geographic areas of interest include, Florida, Texas, Georgia, North Carolina, Ohio, Illinois and Colorado, Wantman said.

Though it evaluates smaller opportunities, WGI’s sweet spot is firms with 50 to 100 people, which typically generate annual revenue between USD 7m and USD 10m. Deal values in that range can reach up to USD 10m-USD 12m, according to the executive.

Transactions on the higher end would require some outside funding such as traditional debt or private equity, though WGI would only be willing to cede a minority stake to a financial sponsor, Wantman noted.

WGI’s primary services are civil engineering planning, surveying and mapping, and landscape architecture. It caters to the heavy infrastructure sector, focusing on roadways, bridges, large sewer lines, and commercial and residential developments.

Six months ago, the company began offering general architectural services, and acquisitions that would “jumpstart” this business are of particular interest, Wantman said. One of the targets WGI is considering is a mechanical, electrical, and plumbing firm that would support its newest division, he mentioned.

Another target would add a completely new business line, Wantman added, declining to disclose details of those discussions.

WGI works with Morrissey Goodale and The Zweig Group to identify targets. George Christodoulo of law firm Lawson & Weitzen provides due diligence support, Wantman said.

Multiples in the space range from 3x-4x EBITDA to 6x-8x EBITDA, depending on size and specialty of the firm, he added.

WGI ended 2016 with just shy of USD 60m in revenue and is projecting close to USD 70m this year, compared to revenue of USD 50m and USD 33.4m in 2015 and 2014, respectively, according to Wantman. WGI typically maintains an EBITDA margin of approximately 20%, he said.

The company was founded in 1991 and has close to 30 shareholders, all of whom are employees. Wantman and his father collectively own the majority of the firm, with ownership stakes of approximately 38% and 20% each, respectively, Wantman said.

WGI has 330 employees and more than 600 active clients, including many state departments of transportation and water management districts.

Aecom [NYSE:ACM], CH2M HILL, Parsons and HNTB are among WGI’s competitors, according to Wantman.

In January of last year, Wantman told this news service WGI was keen on buys in Florida and Texas, but that valuations in the latter state were too rich. Prices in Texas continue to impede deals there, Wantman said for this report. He also noted that the company opened a new office in Miami since then.

In general, Wantman said he feels good about the future growth of the company given the Trump Administration’s expected focus on infrastructure. He noted WGI has no plans to sell outright for the foreseeable future.

The company’s corporate advisors include accounting firm Rodriguez, Trueba & Company, and law firms Richman Greer and Baird Law Group. WGI has a USD 2m line of credit with Bank of America.

by Deborah Balshem in Ft. Lauderdale, Florida
www.mergermarket.com
The leading provider of forward-looking M&A intelligence and data to M&A professionals and corporates

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