How to Buy an Engineering Firm Before It Is Listed
How to buy an engineering firm off market: the ACEC peers, E&O brokers, architects and AEC CPAs who hear first, plus state PE ownership rules and texts.
By Brett Kaufman. 8 years using relationships to build sales pipelines, from political fundraising to a 7 figure business to running matchmaking for two communities. Over 1,000 introductions facilitated.
If you want to know how to buy an engineering firm before it is listed, start with the people around engineering principals: ACEC state organization peers, professional liability brokers, teaming architects and contractors, and AEC focused CPAs. Then stay recent, because when a founder has no internal successor, they mention it to the buyer they remember.
Here is the scene. A professional liability broker is on a renewal call with the founder of a 25 person civil engineering firm. Municipal clients, two senior engineers, a steady backlog. The founder says he wants out in three years and nobody inside can buy him out.
The broker knows two buyers. He calls the one who checked in last month.
Why do engineering firm owners sell to someone they already know?
Because an engineering firm is its licensed people, its client trust and its stamp. A principal will not hand that to a stranger. He wants a buyer someone in his circle vouches for.
The American Council of Engineering Companies calls itself “the business voice of America’s engineering and design services industry” and describes itself as “a federation of 51 state and metropolitan Member Organizations.”
Who hears first when an engineering principal is ready?
The people who see the risk, the work and the books. This is my map, a framework, not data.
| Who | What they notice first | What they want from a buyer | How you earn a place |
|---|---|---|---|
| Professional liability (E&O) broker | Renewal talk about retiring or selling | An insurable buyer who keeps the policy | Ask which principals have no successor |
| ACEC state Member Organization peers | A founder who stopped coming to events | A buyer who keeps the engineers | Attend, volunteer for one committee |
| Architects who team with the firm | A partner taking fewer pursuits | The teaming relationship stays | Ask who they team with and who is slowing down |
| Contractors and public works staff | A firm turning down work | The same people on their projects | Ask which firms they trust |
| AEC focused CPA | Owner age, backlog, the “what is it worth” question | A buyer who closes and keeps the client | Send them diligence work they can bill on |
| Licensing or AEC attorney | Owners asking about ownership rules before a sale | A clean, compliant transfer | Ask what trips up engineering deals |
Most buyers skip the architects. One who teams with five firms knows which principals are tired.
For the association side in depth, read trade association acquisition targets.
How do you get in front of engineering principals as an outsider?
Join honestly and say exactly what you do. ACEC says membership is available through one of its 51 state and regional Member Organizations. Ask your state organization what someone buying a firm can join or attend. Then say, “I am buying one engineering firm to run for the long term. I keep the engineers and the clients.”
ACEC also runs an Annual Convention and Legislative Summit and a Fall Conference. Check the official sites for dates and cities.
What ownership rules come up when you buy an engineering firm?
State rules on who can own and run a firm that offers engineering. I am not a lawyer, so treat this as the list of questions to bring to one.
Licensing is state by state. NCEES says its members are “the 68 engineering and surveying licensing boards from all 50 states, the District of Columbia, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.” Each board sets its own rules. Some states have rules about who may own a firm that offers engineering services, whether the firm must register with the board, and which licensed engineer must be in responsible charge. Those rules vary by state. A firm that works in four states may face four sets.
Before you write an offer, ask:
- Does each state the firm works in require the firm itself to register or hold a certificate?
- Are there limits on ownership by people who are not licensed engineers?
- Which licensed engineer must be in charge, and does that person stay after closing?
- What has to be filed with each board when ownership changes, and when?
Get the answers in writing from the boards or a licensing attorney.
What do you check first in an engineering deal?
People, backlog and risk. Before you talk price, ask:
- Which licensed engineers sign the work, and will they stay?
- How much revenue comes from the top three clients, and are they public agencies or private?
- How much signed backlog is there, and how long does it run?
- What does the professional liability claims history look like?
- Do the client relationships sit with the founder or with the project managers?
The SBA’s guide to buying a business says to consider hiring an attorney and an accountant. In engineering, pick ones who have done AEC deals.
How to buy an engineering firm: the 90 day plan
Here is how I would run it.
- Days 1 to 14: pick the lane. Civil, structural, MEP, geotechnical or environmental. One region. A head count range. Your lender conversation done. A licensed engineer partner identified if your states require one.
- Days 15 to 30: the rules. Call the licensing board in each target state. Meet a licensing attorney. Write down what an ownership change requires.
- Days 31 to 45: the association. Contact your ACEC state Member Organization. Attend one event. Volunteer for one committee.
- Days 46 to 60: the risk and the numbers. Two professional liability brokers who write engineering firms, two AEC CPAs.
- Days 61 to 75: the teaming partners and brokers. Lunch with three architects. Two or three specialists from the IBBA broker directory. Send a one page buyer profile.
- Days 76 to 90: one coffee a week with a principal. Peer talk, no pitch. End with “who else should I know?”
- Day 90 onward: a note per person, a real reason to reach out every six to eight weeks.
What do you text the people who hear first?
Short, specific, under 40 words. Illustrative examples.
To an E&O broker:
“[Name], thanks for walking me through how you place coverage for engineering firms. If a principal ever wants a quiet talk about what comes next, I keep the team and the policy. Glad to just listen.”
To an architect:
“[Name], good to meet at the chapter event. I am buying one civil firm in the region. Your read on which engineers you trust was the clearest I have heard. Mind if I check back in a few weeks?”
To a broker, 60 days later:
“[Name], still buying one civil engineering firm in the region, lender lined up, licensed partner in place. Congrats on the deal you closed. Anything coming that fits?”
For the owners and connectors already in your phone, start with how to find owner direct business deals in your network. Other industries are in how to buy a business in a specific industry. The full system is at deal flow for business buyers.
Where does this break?
Between conversations. Two E&O brokers, a state organization, three architects, two CPAs, an attorney, two brokers and five principals. That is 16 people. By month four you are in diligence on another firm and nobody has heard from you. Then the E&O broker hears the founder is ready, and he calls the buyer he talked to last week.
That is the job I built FRONT OF MIND for. After a meeting, say a name and a sentence out loud, snap a business card or badge, or take a selfie together, and it is filed under the event. Then it opens on your 10 minutes for today. Each person has a one line reason why today: they posted, their company was in the news, you met weeks ago and never followed up, or they are going cold. Every draft is a text style message, 40 words max. Nothing sends without your tap, and it learns from your edits. Ask Liala “who do I know who insures engineering firms” and get the right people with why.
It runs in your phone’s browser and can be saved to your home screen. There is no native iPhone app yet. Your contacts are encrypted. No one on our team looks at them. Export or delete anytime.
Start free with your first 25 contacts and see which architect comes up first.