The views expressed in this writing are those of the author and do not necessarily represent the position of GAI Consultants, Inc.
Over the course of a 50-year career with GAI, company Chairman and CEO Gary DeJidas, PE, MBA has served at the forefront of the firm’s growth from a small single office in Pittsburgh, PA to 25 offices around the U.S. staffed by more than 700 highly skilled professionals.
In this series, Gary shares some of the most valuable lessons he’s learned on his journey toward building a thriving, multidiscipline, resource-rich company that provides industry-leading engineering, planning, and environmental expertise to energy, transportation, development, government, and industrial clients.
In this installment, Gary discusses how thoughtful mergers and acquisitions (M&A) can be key to growing a business and taking it to new levels of success.
Growing a Strong, Cohesive Company
M&A transactions offer a very effective way for companies to grow their talent pool and geographic footprint—and while M&A is categorized as ‘inorganic growth,’ it is vital that M&A results in natural extensions of a company’s offerings and philosophy in order to be truly successful long term. A well-executed M&A due diligence process can go a long way toward identifying a potential partner’s financial status and general operating practices; however, the somewhat intangible consideration of corporate culture is very important to the goal of emerging from an M&A transaction as a stronger company with a cohesive, shared vision.
The Right Fit
GAI recently acquired Petroleum & Environmental Engineers LLC (PGH), an Austin, TX-based petroleum engineering company. Post-acquisition, PGH is continuing to operate as it has historically—under its own name and with no change to its structure or to the staff who service the company’s current clients and contracts.
We focused great effort on determining that PGH offered a natural extension and common-sense strengthening of GAI’s power engineering services—yet it was the overall compatibility of both companies’ cultures and philosophies that made the acquisition a truly solid move.
It can be relatively simple to assess how satisfied a company’s clients may be—and much of PGH’s work comes from referrals and repeat clients. Yet, in my view, the true determining factor for viable M&A comes down to alignment with a potential partner’s values, how they run their business, and how they treat their staff.
Leading GAI for many years and honing my knowledge through peer reviews, seminars, and other learning opportunities has allowed me to grow my insight as a chief executive: When it comes to business, I feel confident that I know the right questions to ask and how to process the answers I receive. I met with PGH’s CEO during our due diligence process, and can say that I came away confident he was committed to operating with professionalism and integrity, which translates to how PGH’s staff operate. The experience left me very comfortable that PGH was a good cultural fit with GAI, and my early post-acquisition observations have supported this judgment. As a result, the GAI operating philosophy remains cohesive, our expertise expands, and we grow with the help of a natural partner.
A History of Smart Expansion
GAI’s practice of seeking out M&A with companies that naturally complement our services and operating philosophy has proven a solid strategy for growing our company’s expertise and service territory in recent years.
Looking back over the last 15 years or so, our merger with Bonar & Associates, Inc. allowed us to expand our presence in Indiana and the Midwest in the civil and transportation markets; the acquisition of Orlando-based Metz & Associates, LLC enabled us to enhance GAI’s bridge experience with local governments and DOT transportation agencies and market our capabilities in the Southeast, Midwest, and Northeast; acquiring Lee-Simpson Associates helped consolidate GAI’s position in the aviation engineering services market; and with the addition of Lotspeich and Associates, GAI bolstered our ecological sciences consulting offerings in Florida, including wetland delineation and permitting and protected species surveys and management. GAI had worked alongside landscape architecture company Bellomo-Herbert for many years, building a solid relationship in advance of our acquisition of the firm; this transaction, along with the addition of development analysis firm Real Estate Research Consultants, provided key components of GAI’s Community Solutions Group (CSG) and grew our capability to offer clients a comprehensive suite of landscape architecture and urban planning and analytics services.
In each case, primary considerations in our M&A strategy looked beyond merely buying up staff, clients, contracts, or territory to consider the long-term compatibility of the partnership—and this has proven to be a sound practice.
Creating a Platform for Future Growth
Over the past year, GAI’s Board of Directors worked to identify a potential private equity firm that would be interested in GAI as a ‘platform company’ to acquire and then grow, both organically through hirings and inorganically through further acquisitions. We found that firm in Comvest Partners, and in fall 2022, GAI’s employee-owners voted to approve the merger.
Throughout the transaction lead-up process, we found that the sound M&A strategy GAI had applied over the years had helped make us a very desirable merger prospect for Comvest. Following the transaction, we will continue operations under our established company banner while gaining the additional capital necessary to advance future M&A opportunities and maintain GAI’s growth trajectory.
And one very important takeaway from the Comvest merger relates back to my key point in this discussion: we maintained unwavering focus on determining that Comvest’s business philosophy and operating principles aligned well with GAI’s when determining if the merger was the right move for the company. If the past is any indicator of tomorrow’s possibilities, I am confident that the proven M&A processes that have worked so well for GAI up to this point have positioned our company and our staff for a long and successful future.
More Time-Tested Business Tips from Gary DeJidas:
GAI offers comprehensive transportation, planning, energy, and environmental engineering consulting services from locations throughout the U.S.—message GAI online and start the conversation about how our multidiscipline professionals can meet your unique project needs.
Over more than 5 decades with GAI, Chairman and CEO Gary DeJidas, PE, MBA has led the firm to continuous growth, geographic expansion, and financial success. GAI’s Chairman and CEO since 2003, Gary began his GAI career as a civil engineer in the firm’s single Pittsburgh office, and soon embarked on a path toward personal and company growth by establishing GAI’s first branch office in Orlando, Florida. That initial expansion set the company on an ongoing upward trajectory that today sees Gary helming a firm with dozens of offices around the U.S. staffed by hundreds of multidiscipline transportation, energy, planning, and environmental professionals.
