Since it was founded in 2010, N|V|5 Global, a publicly owned international engineering services provider based in Hollywood Fla., has acquired 25 companies, five of them in 2017 alone, including, most recently, Boston-based Richard D. Kimble Co., Inc. (RDK Engineers), a 120-year-old MEP engineering and design firm with 185 employees working out of five East Coast offices.
Speaking by phone from the Red Rock Resort in the Summerlin, Nev., master planned community, where N|V|5 Global was holding its annual shareholders meeting, Dickerson Wright, its Chairman and CEO, told BD+C that the addition of RDK Engineers “opens up the Northeast for us,” and strengthens N|V|5’s MEP practice.
Aside from the RDK deal, N|V|5’s acquisitions this year have included H&K, a $6 million geotechnical engineering firm in Northern California; Lochrane, a $6.5 million civil engineering firm in Orlando, Fla.; and Energenz, a $2 million international energy services company based in Irvine, Calif. Last October, NV5 bought JBA Consulting Engineers.
In its first quarter ended April 1, N|V|5’s revenue increased by 42.7% to $64.1 million, and net income grew by 10.4% to $2.27 million.
N|V|5 Global has been growing through acquisition since it launched eight years ago. It places a premium on keeping the employees of the companies it purchases in place, and making sure the acquisition is adding value to the firm. Image: N|V|5 Global
N|V|5 paid for its acquisition of RDK Engineers with a combination of cash and stock. Wright said that it’s typical for his company to pay 50% of a deal’s value in cash.
N|V|5 focuses on construction quality assurance, infrastructure, engineering and support services, energy, program management, and environmental solutions. Over the years, the firm has developed a process to determine whether another business would be a good fit through acquisition. Its criteria, explained Wright, revolve around added value, scalability, IT synchronicity, and single branding.
Perhaps most important, a business’s management has to be completely on board with the merger. Wright pointed out that there are 145,000 engineering firms in North America alone, most of which are private companies. This fragmentation has turned the engineering sector into a revolving door that has eroded any sense of loyalty and continuity between employer and employee.
As part of its acquisition strategy, N|V|R uses a carrot and stick approach to keep valued employees from walking out the door: It gets the managements of the companies it buys to sign employee agreements, in exchange for restricted NV5 stock they would receive after four years of service. Twenty-three of RDK’s managers signed that agreement.
“I am a big believer in partners and a big believer in shareholders; that’s why we’re public,” said Wright.
Christopher Cummings, PE, LEED AP, RDK’s CEO, said he believed that N|V|5 shared RDK’s “priority of providing innovative solutions to our clients through practical ingenuity, efficiency, and quality engineering in every project.”
Wright observed that a lot of mergers and acquisitions fail because too many companies get caught up in completing the deal without thinking through possible cultural collisions. “You’re crossing an emotional bridge [when two companies merge] and often times people aren’t listening to things that end up being problems,” such as allowing the acquired company to operate with the same autonomy or brand it had as an independent.
N|V|5, which has 2,300 employees and 102 offices, continues to look for companies that could be strategic fits. Wright said he sees “phenomenal opportunities” in Texas (where N|V|5 already has offices in Dallas and Austin). “But I don’t want to go in on a company without a solid foundation.”
He said his firm “loves” water-related projects, although he acknowledges that acquisition costs in that sector are high. N|V|5 is also interested in getting deeper into environmental projects, even though they have “a high barrier of entry,” said Wright.
N|V|5 operates four offices in Asia. But international expansion is less likely. “Only if our clients bring us there,” said Wright. For example, it just completed a liquefied natural gas processing plant in Angola for Bechtel Energy, for which N|V|5 provided quality control and energy services.
N|V|5 Global has provided MEP engineering services for a number of MGM-owned properties, including MGM Cotai in Macau. N|V|5's chairman, Dick Wright, said his company's international growth will be client driven. Image: N|V|5 Global
Related Stories
| Dec 20, 2011
Third annual Gingerbread Build-off winners announced
Nine awards were handed out acknowledging the most unique and creative gingerbread structures completed.
| Dec 20, 2011
BCA’s Best Practices in New Construction available online
This publicly available document is applicable to most building types and distills the long list of guidelines, and longer list of tasks, into easy-to-navigate activities that represent the ideal commissioning process.
| Dec 20, 2011
Aragon Construction leading build-out of foursquare office
The modern, minimalist build-out will have elements of the foursquare “badges” in different aspects of the space, using glass, steel, and vibrantly painted gypsum board.
| Dec 20, 2011
HOAR Construction opens Austin, Texas office
Major projects in central Texas spur firm’s growth.
| Dec 19, 2011
HGA renovates Rowing Center at Cornell University
Renovation provides state-of-the-art waterfront facility.
| Dec 19, 2011
Chicago’s Aqua Tower wins international design award
Aqua was named both regional and international winner of the International Property Award as Best Residential High-Rise Development.
| Dec 19, 2011
Summit Design+Build selected as GC for Chicago recon project
The 130,000 square foot building is being completely renovated.
| Dec 19, 2011
USGBC welcomes new board directors?
Board responsible for articulating and upholding the vision, values, mission of organization.
| Dec 19, 2011
Davis Construction breaks ground on new NIAID property
The new offices will total 490,998 square feet in a 10-story building with two wings of 25,000 square feet each.
| Dec 19, 2011
Survey: Job growth driving demand for office and industrial real estate in Southern California
Annual USC Lusk Center for Real Estate forecast reveals signs of slow market recovery.