Sellside M&A Advisory Services for Wilson Arch. Group (now Dewberry)

PSMJ Client Dewberry Architects
"PSMJ was able to add perspective during the negotiations, and was able to step in and be our spokesman when we had to get down and wrestle in the mud with someone who was eventually going to be our partner and boss."

The Client

Founded in 1986, Wilson Architectural Group, now Dewberry Architects, is a nearly 40-person architectural firm with a portfolio of healthcare, corporate and commercial, industrial, sports and recreation, laboratories, and civic buildings in Houston and throughout Texas. Headquartered in Houston, Texas, Wilson has developed a strong diverse background in various project types, which gives the firm a broad insight into the general design and technology issues facing today’s construction and development programs. Wilson Architectural Group was acquired by Dewberry in late 2015.

The Challenge

According to Gary Wilson, founding partner of Wilson Architectural Group, he began thinking about ownership transition more than 7 years ago, yet determining a fair value for his firm was the first challenge. “I had four firms approach me about acquiring our firm, and a couple of times the negotiation went along for a while, he recalls. “Whether they lasted a long or a short period of time, I discovered that what we thought our firm was worth and what others thought it was worth were two widely different numbers. “

“Then I decided that I needed to know what my firm was really worth, and figure out how to transition my ownership,” Wilson adds. “My first thought was to find out what the firm was worth and flip it into an ESOP. I became convinced that I was not big enough to do an ESOP, and so we looked at it from a different direction.”

The Solution

Wilson came to the conclusion that no one locally had the expertise or the breadth of knowledge to understand what his firm was worth on a national basis. “I felt that a national firm was probably going to give me a better picture of what the real value was,” he says. “After doing a little bit of research, I came to the conclusion that PSMJ was the most knowledgeable. So I gave PSMJ a call, and signed them up to do a valuation.”

Initially, PSMJ provided Wilson with information on what his firm was worth if he transitioned it internally, externally, and or as a strategic purchase. “When I saw the lowest and the highest numbers, I said ‘that is a big range’,” Wilson recalls. “And so I asked how do I make it a smaller range?

Consequently, PSMJ conducted a blind survey of Wilson employees to understand company culture, and a blind survey of its clients to evaluate the prospect for continuing work. “They came back and said the range is smaller,” Wilson says. “Here is your firm’s worth if you transition it internally, externally, and if it’s a strategic purchase. And then they said they could possibly sell it for the strategic transition price. Then I asked how do we do that, and they came up with a list of possible firms.”

The Results

The partners at Wilson sought a firm that could help then increase its capacity to support its clients, provide more professional growth opportunities for its employees, and support the future longevity of the practice in Houston.

Eventually, PSMJ connected Wilson with Dewberry, and, according to Wilson, the negotiations went well and quickly because the two firms were a good fit on a number of levels. “I was looking to leverage myself out,” Wilson says. “And they were looking to get into the Gulf Coast, and to do primarily healthcare, and we happen to fit both of those criteria. They said they were writing a description of the ideal firm when PSMJ approached them with our portfolio, and they said this is what we are looking for, and so it didn’t take long for us to agree to agree.”

Reflecting on his path to transitioning firm ownership in such a strategic sale, Wilson says that PSMJ helped keep their expectations realistic. “We knew what a reasonable price was and why it was reasonable, he says. “We knew what our strengths and weaknesses were. They kept our expectations in line with what the market would bare. It turns out what they told me was very close to what we ended up selling the firm for.

“Also PSMJ was able to add perspective during the negotiations, and was able to step in and be our spokesman when we had to get down and wrestle in the mud with someone who was eventually going to be our partner and boss,” Wilson concludes.