Private engineering and technical consulting firm Salas O’Brien Inc. has done quite a few deals over the past two decades, but CEO Darin Anderson refuses to use the word acquisition.

“We call them mergers,” Anderson said via Zoom, sitting at a desk at one of the firm’s Florida offices where he had just finished revealing to his more than 2,200 employees the company’s May deal for Daytona Beach, Fla.-based Moisture Intrusion Solutions. “We look at them as a form of partnership — we’re always looking for more partners in the organization. So it’s just a philosophical approach for us.”

It’s not completely philosophical, of course — Salas O’Brien’s targets almost always roll equity into the deal to join the company’s thousands of other employee owners. The company even recently changed its ownership structure because it wasn’t working for its inorganic growth strategy.

“Companies were looking to join us, but they couldn’t roll equity,” Anderson explained. “We had to take them out completely because we had to dribble out shares, and they weren’t excited about that.”

All Aboard the Bullet Train

Indeed, since 2019 Salas O’Brien has been aggressively adding specialty E&C firms across the country, combining with more than 25 businesses in that span alone.

Anderson expects to continue to keep the train rolling at a healthy pace over the next several years as he pursues the goal of building his company into a $150 million to $200 million-in-Ebitda business in the next five years.

The firm has more than doubled its head count since 2020.

As the company approaches deals, Anderson said he always asks himself: “Does the organization fit the strategic niche we are trying to get better in? And two, are they a healthy, strong, vibrant organization?”

The company has entered or expanded in ESG consulting, tech and acoustics over the past few years and increased its exposure in the energy, healthcare and federal sectors.

All Hands on Deck

Anderson has what could be viewed as a simple and direct approach to transactions.

“We say ‘Hey, I think we’ve got a good story. Here’s what we have to offer — long runway, passionate people; we can lift each other up and do better projects,” he explained.

The 30-year engineering industry veteran has the same open book mentality when it comes to discussions with the firm’s employee owners.

“They know what’s in my head,” he said. “I’m very transparent with what our goals are, and at the end of the day my main goal, regardless of whether we’re private or public, is to make sure we have the healthiest environment possible for our team members and that we’re doing great projects.”

Anderson, who is among the largest shareholders of Salas O’Brien (though no shareholder owns a majority stake) and who joined the firm in 2006, also keeps his top trusted managers up to speed on every deal they approach.

As the firm approaches a company and moves toward signing a letter of intent and doing due diligence, he said the top 20 to 25 people within the organization, from senior operations managers to services managers such as the CFO and CIO, are quickly brought into the details of the transaction.

Unanimous approval among operational leaders is the goal on every deal.

When the Hunter Becomes the Hunted

Beyond the CEO, other large minority Salas O’Brien stakeholders include the ESOP profit sharing plan created when the firm did away with its ESOP structure, Los Angeles firm Caltius Capital Management LP and the state of Wisconsin.

But the bulk of the firm is employee owned, and Anderson’s openness with that substantial shareholder base also pertains to his future about the company’s own future as a target.

“We will probably take on some sort of private equity minority partnership over the next several years, and that’s to provide some liquidity to our shareholders,” he said. “We’ve had good growth.”

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