AEC firms contemplating ownership transition should consider private equity as a viable option. AEC firm owners typically spend a substantial portion of their careersometimes the entirety of itguiding and trying to build a successful firm. Theres a point in time when owners desire liquidity and a seamless transition of ownership. At Godspeed we value management equity participation in any capacity, as we want management to think like owners while aligning incentives towards the execution of the long-term strategic plan.. Our team is principled, execution-focused, and exceedingly creative in structuring and providing the right solution. Lucchesi said Architect Equity is still in the phase of acquiring small and middle-market companies; the firm has yet to sell any of its portfolio companies, and none of those companies have otherwise exited through IPOs or SPAC deals. Their latest investment was in The Pest Group as part of their Other Investors on . your inbox. Timec Oil & Gas parent company, Ferrovial, is an infrastructure services firm headquartered in Madrid. Greater access to capital and management expertise. site you are consenting to these choices. Venture capital, for example, is highly dilutive and venture debt does not scale with assets. Solid hemlock timbers provide a warm and natural counterpoint to sleek white walls and exposed concrete floors. CBI websites generally use certain cookies to enable better interactions with our sites and services. Join your AEC industry peers in Chicago, September 26-28, 2022, for the 7th annual Women in Design+Construction Conference, hosted by the BD+C editorial team and the 35-person WIDC Advisory Board. Other valid concerns include holding at-risk rolled equity that you no longer control, disruption of the firms culture with too strong a focus on profit growth and through additional acquisitions, and reduced ownership transition opportunity when compared with an internal transition. from 8 AM - 9 PM ET. We liked them and, six months into it, we still like them.. Despite the desire to optimize value, many AEC owners hesitate to consummate a deal because they cant bear to see their hard-earned firm legacy and culture vanish when absorbed into a larger entity. A large board room the pitch room is neighbored by a more intimate meeting room conducive to closing the deal, a process they know all too well. We have three partners slowly working their way out, all on different time frames. The firm offers worldwide coverage with over 500 professionals in 24 locations across America, Asia and Europe. The U.S. Supreme Courts ruling to limit the Environmental Protection Agencys power to regulate greenhouse gas (GHG) emissions from power plants dealt a significant blow to our ability to fight the climate crisis with federal policy. Provided liquidity against B2B SaaS recurring revenue streams to U.S.-based data provider. Architect Capital is a San Francisco-based asset manager that provides liquidity against novel, esoteric, and tech-enabled assets. All rights reserved. If you really study the value, take your engineering hat off, get into the financials of the business and hire a good advisor, youre going to have better exit alternatives. Our time horizon is five to seven years, says Lake. Gambino says that other factors drove the decision to choose Godspeed over several other suitors, but getting fair market value for the firm that he and the other shareholders spent 30 years building was an important consideration. This space is primarily focused on the visitor experience. Copyright 2022 Zonda Media, a Delaware corporation. Karl Wohler is a Sell-side M&A Advisor for PSMJ Resources, Inc., the leading publishing, executive education, and advisory group devoted completely to improving the business performance of A/E/C organizations worldwide. ABOUT THE AUTHOR Provided credit facility to Mexican Neobank to support growth of the company's tech-enabled consumer lending product. Private equity has a perception problem in the architecture, engineering and construction (AEC) world. Its stating the obvious, but cultural fit is really important, says Polino. Each day, our editors assemble the latest breaking industry The only way to make sure you get fair market value is to get bids from non-engineering firms. At Architect Capital, we are thrilled to be at the forefront of firms investing in the region as we approach an inevitable period of exponential growth.". "Architect has been an excellentpartner for ourcapital needs. We were interested in not only ownership transition, but also leadership transition, says Sadler at Brockenbrough. Architect Capital's team has a history of delivering a unique set of tailored facilities to early-stage companies. Their latest acquisition was Ferrovial - Timec Oil & Gas on December 02, 2021. For reprint and licensing requests for this article, CLICK HERE .

According to the company, the firms it acquires are generally undergoing some form of business transition at the company or industry level.

Weve promoted from within for our three market sectorsBob is already running our site departmentand we already had the future leaders for the other two. The journal of the American Institute of Architects, Tucson, At the end of the day, maximizing shareholder value and protecting our culture were the priorities., Better stewardship of your culture and firm legacy. We had several good offers from really good companies, but when it all came together, it became easy to choose., Ability to offer more leadership and ownership incentives for key employees. Sagan notes that, "while I have been investing in companies in Latin America over the last six years, we are still in the early stages of the area's FinTech story. This is the sixth acquisition for Architect Equity, which was started in 2018 by Jay Yook and Dionisio Lucchesi, who both had previous positions that involved investing in companies with complex special situations. We were at this for several years, and it took a long time to get here, but we ended up realizing that private equity was the best fit for us.. This deal adds to GCAs extensive track record as a leading financial advisor in the private funds sector, with multiple successful fundraisings for a variety of private equity strategies. Architect Equity is a private equity firm that specializes in acquiring small to mid-sized companies with revenues between $25 million and $500 million.

We felt comfortable with Godspeed, culture-wise. For more information, visit gcaglobal.com. The CB Insights tech market intelligence platform analyzes millions of data points on vendors, products, partnerships, and patents to help your team find their next technology solution. At a minimum, AEC firms contemplating ownership transition should consider private equity as a viable option. Provided credit facility against receivables to tech-enabled consumer lender to support lender's mission of providing fair and simple credit to Mexican consumers. We wanted to retain our current culture and our independence to a certain degree. This sector is all about human capital, and retaining employees and clients. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. Outside Prague, the Sugar Factory, a mixed-used residential development with public space, marks the largest project to use the sustainable material Rebetong. GCA acted as exclusive placement agent to Architect Equity in connection with this fundraise. Such leadership usually involves sacrifices and commitments that non-owners dont have to make (and may not even know about). 2022 copyright Building Design+Construction. Architect Equitys latest acquisition, Houston-based Timec Oil & Gas, specializes in mechanical services, welding, repair and inspection at high temperatures in support services to oil production companies. HORIZONTV FEATURING BD+C: WATCH EPISODES ON DEMAND AT HORIZONTV. It is also often used as an alternative workspace by staff. While traditional forms of equity and debt financing in the venture ecosystem are still very much integral to the growth of these companies, traditional financing is not engineered to support the growth of a company's underlying financial products. Investors expecting to spin off an AEC firm in less than five years are likely to be disappointed, for example. Financial terms of the transaction were not disclosed. James knows very well what will make a deal work - for the fund and the company - and he both delivers that and focuses on it. Read Our Newsletter (FREE). Godspeed partnered with the engineering firms management to establish a premier, multi-discipline engineering and consulting services growth platform providing services globally to a wide range of public- and private-sector clients. We had a lot of faith in the team because they had experience in our industry. "He has perfected the balance between scalability, simplicity, and structure needed when you are raising your first $10 million to $40 million in debt funding.

New firm provides fast-scaling businesses with financial solutions complementary to venture capital and venture debt. Win whats next.

Karl has a BS in Chemical Engineering from the University of Massachusetts and an MBA from Babson College. Other options include selling to a strategic buyer or recapitalizing with a different private equity firm.

This is a profile preview from the PitchBook Platform. Provided multi-tranche facility to Colombian Buy Now, Pay Later company against consumer receivables to support the company's product expansion. "The global technology and startup industry is evolving quickly, and new forms of financing to fund novel and underappreciated assets are a necessary part of that evolution," says James Sagan, Founder and CEO at Architect Capital. The work style supported by their new office echoes the preferences of its technology clients flexible, collaborative, and transparent.

The Fund was a uniquely structured vehicle that provides evergreen capital to pursue Architects strategy with committed capital, rather than on a deal-by-deal basis. Stay up to date on everything we're up to. Built by the people that run the business, GCA is a firm of experts who focus on deals that require commitment, original perspective, skill and exceptional networks. Our site uses cookies to enhance the viewing experience. El Segundo-based Architect Equity has acquired oil industry services firm Timec Oil & Gas, Inc. from Spanish infrastructure company Ferrovial, Architect Equity announced Dec. 1. As always, with regard to evaluating any potential suitor in an ownership transition scenario, thorough due diligence is critical. Lake says that reinvesting in the recapitalized firms strategic initiatives is imperative to driving long-term equity value creation. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. Architect Equity is a private investment firm focused on acquiring companies that are facing situational, operational and/or financial complexities. While Architect Capital has a global investment mandate, the firm is most active in Latin America, with a focus on supporting technology companies that are modernizing financial services, enabling E-Commerce growth, or disrupting other traditional industries in the region. It builds and manages toll roads, manages airports and provides construction services. Copyright 2022 CB Information Services, Inc. All rights reserved. Another advantage that private equity offers is a growth opportunity for emerging leaders. The team at Architect Capital brings deep expertise in executing cross-border transactions, generating unique in-market insights, making long-lasting connections across the tech ecosystem, and working with early stage businesses across the globe. If you invest in your people, culture, technology, and corporate infrastructure to enhance your support of your customers, while engaging your people with high-quality work and career advancement opportunities, you optimize the potential for growth and margin improvement over the long-term, he says. Timec is an excellent opportunity for Architect to partner with a highly qualified management team that is leading a proven business at a time when oil demand and supply is increasing, and energy operations are preparing for increased production in the coming years, Lucchesi, who is Architect Equitys managing director, said in the announcement. CBI websites generally use certain cookies to enable better interactions with. SAN FRANCISCO, June 3, 2021 /PRNewswire/ --Architect Capital, an asset-based lender to early-stage technology businesses, announced that it has launched with over $100 million to provide non-dilutive or less-dilutive financing solutions to high-growth and technology-enabled businesses.

Extensive glass surfaces at offices and conference rooms highlight the great views and distribute daylighting throughout the office. With a focus on FinTech, E-Commerce, and SaaS companies in Latin America and the United States, Architect Capital's mission is to support innovative founders across the globe by structuring and delivering unique asset-based products complementary to traditional venture capital. The investment in Prime Engineering and Brockenbrough is Godspeed Capitals first AEC platform, which both firms regard as a positive. Here is why: Quicker payout for retiring members and higher exit valuation. Get the full list, Youre viewing 5 of 11 team members. And, while both private equity firms and large strategic buyers in the AEC space typically pay market value as opposed to a discounted and prolonged internal transitionprivate equity firms tend to pay selling owners more up front with fewer restrictions. Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model. Typically, the younger generation of management doesnt have the capacity or experience to execute a management buyout. Private equity: An increasingly attractive alternative for AEC firm sellers, By Karl Wohler, Senior Mergers and Acquisitions Advisor, PSMJ Resources, Inc. Proliferation of information combined with a shift in consumer behavior has led to the disruption of traditionally asset-heavy industries, such as financial services, real estate, and retail. Private equity buyers can offer an attractive alternative to a large strategic buyer because their model creates new platforms that require the retention of key management and a legacy culture that helps ensure against employee departures. We have the capacity with our investor base and current investment program to focus long term. our sites and services. GCA Advisors, LLC is the US entity of GCA, a global investment bank that provides strategic M&A and capital markets advisory services to growth companies and market leaders. By providing less dilutive capital that is complementary to equity capital, along with an array of other benefits, Architect Capital helps companies grow their impact and financial returns. We wanted someone that would value our whole firm and invest in growing all of our market segments, says Polino, who has taken on a greater leadership role as Sadler is easing toward retirement. Architect Equity acquired 5 companies. Here is why. Youre viewing 5 of 6 investments. By continuing to use this site you are consenting to these choices. And while deal fatigue can become a real factor in a prolonged process, owners should avoid settling for a flawed deal just because they spent time, money and emotional energy pursuing it.