MERGERMARKET: WANTMAN GROUP SEEKS BUYS; FLORIDA, TEXAS AMONG AREAS OF INTEREST
Wantman Group Inc. (WGI), a privately held engineering consulting firm based in West Palm Beach, Florida, is actively looking for acquisitions, according to President David Wantman.
Morrissey Goodale and The Zweig Group have been retained to help the company identify targets. George Christodoulo of law firm Lawson & Weitzen provides due diligence support, Wantman said.
The executive said he is interested in small and large targets and “would love to buy a firm” with 50 to 100 people. Businesses in that range typically generate between USD 7m and USD 10m in revenue and deal values can reach USD 10m-12m on the high end, he said.
Transactions of that size 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 said. The company has an existing USD 2m line of credit with Bank of America, he added.
WGI is a full-service consulting firm whose offerings include civil engineering planning, surveying and mapping, and landscape architecture. It does not provide pure architectural services, so an acquisition of a player in that sector is one example of an ideal buy, the executive said.
The company would consider targets throughout the US, though the southeast and northeast are of particular interest, according to Wantman. It is especially keen on Texas and Florida.
WGI has 300 employees and caters to the heavy infrastructure sector, focusing on roadways, bridges, large sewer lines, and commercial and residential developments.
The company had 2015 revenue of USD 50m, up from USD 33.4m the year prior, Wantman said. It typically maintains an EBITDA margin of 20% or more, he added.
Multiples in the space range from 3x-4x EBITDA to 6x-8x EBITDA, depending on size and diversification, according to Wantman.
Within the past 24 months, WGI has made two acquisitions, both of Florida-based firms with up to USD 3.5m in revenue and between 15 and 30 employees. The company is currently eyeing two other small, Florida-based targets and is close to signing a Letter of Intent with one, Wantman noted.
The company has been “looking intently” in Texas the past two years but has found valuations too rich, the executive said. If WGI were to take on a PE partner, it would likely use that capital to acquire a Texas-based company at those higher prices, he said.
WGI has more than 500 active clients, including many state departments of transportation and water management districts.
Aecom (NYSE:ACM) is its primary competitor, Wantman said.
Wantman’s father Joel originally formed Wantman & Associates and Meridian Surveying and Mapping in 1972. He sold those companies to Stanley Consulting in 1989, later starting WGI in 1991. David joined the company in 1999 and became president four years ago.
Twenty employee shareholders own the business, with Wantman (38%) and his father (20%) possessing the majority share.
Though Wantman said the company would be a highly attractive sale target for a larger competitor and/or a domestic or foreign player seeking to enter the Florida or southeastern US, there are no plans to sell WGI outright.
The company’s corporate advisors include accounting firm Rodriguez, Trueba & Company as well as law firms Richman Greer and Wright, Fulford, Moorhead & Brown.
by Deborah Balshem in Ft. Lauderdale, Florida
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