Geotechnical Engineering Firm Valuation: EV/EBITDA & EV/Revenue

Most geotechnical firms trace back to a first borehole, drilled by the founder with a single rig, and grew one machine at a time into the fleet that now carries the firm’s name onto sites across its region. What that fleet and the firm around it will fetch depends on how many credible buyers compete for them, and 74 different buyers have acquired geotechnical firms since 2015. This page sets out the deal record for geotechnical firms, what moves their value, who is buying and how to prepare for an approach.

We count 145 acquisitions of geotechnical engineering firms worldwide since 2015, 102 of them since 2021, made by 74 different buyers, and private equity firms and their platforms made 44% of them. Ground and site investigation and geotechnical drilling firms account for 65 of the deals, firms combining geotechnical engineering with field materials testing for 51, geotechnical design consultancies for 26 and instrumentation and monitoring specialists for 3.

The figures below are set against site-based construction materials testing and special inspection firms, which share several of the same buyers, and our TIC company valuations page covers the wider sector.

Geotechnical Engineering Deal Multiples

Of the geotechnical deals in our database, 11 disclose a deal value, 7 carry an EV/Revenue multiple and 2 carry an EV/EBITDA multiple, so the EBITDA median rests on two deals.

Because the EBITDA median rests on two deals, an owner should start from revenue, where geotechnical deals sit below field testing, and test that figure against the firm’s own earnings and work mix. The middle half of disclosed geotechnical deal sizes runs from about $3.9M to $36.1M.

We track every geotechnical engineering acquisition since 2015, 145 deals by 74 different buyers, so we know which buyers fit a firm like yours and what they have paid.

What Drives a Geotechnical Engineering Valuation

Due diligence on a geotechnical firm covers the points below, and the ones built on people and accreditation take the longest to put right before a sale.

Chartered and licensed engineers. Geotechnical reports and designs go out under the name of a qualified professional: in the US a licensed professional engineer or geologist, and in the UK a chartered engineer or geologist, with senior staff often listed on the UK Register of Ground Engineering Professionals (RoGEP). Buyers count registered staff by grade, check how many projects still depend on the owner’s signature and ask which senior engineers will stay. A staff list with each person’s registrations, grade, length of service and the projects they sign off answers this.

Investigation standards and laboratory accreditation. Ground investigation in the UK follows BS 5930 and feeds design to Eurocode 7, and in France the NF P 94-500 standard sets out the sequence of geotechnical missions from G1 to G5. Where a firm runs its own soil and rock laboratory, buyers read its ISO/IEC 17025 accreditation scope test by test and check how much of its work comes from outside clients.

Rigs, crews and capital spending. Drilling firms own cable percussion, rotary and sonic rigs and cone penetration test (CPT) trucks, and each machine needs qualified drillers and regular replacement. Buyers look at the age, hours and utilization of every rig and set the spending needed to keep the fleet working against the margin it earns. A rig register with purchase dates, hours, maintenance records and the crew assigned to each machine shortens this part of due diligence.

Frameworks and repeat clients. Developers and contractors appoint investigation firms project by project, while highway, rail and water authorities appoint them to multi-year frameworks or on-call contracts. A framework place gives access to call-off work for its whole term, so buyers ask how much revenue has come through each one, how many years remain and whether the place is held in the company’s name. A schedule of frameworks and on-call contracts with term, years remaining and revenue drawn shows this on one page.

Service mix. Investigation earns on rig days, design on engineers’ hours and construction-phase testing on technician visits, and a firm that carries a project from the first borehole through foundation design to compaction and concrete testing keeps the client for longer. The mix also follows geography: 47 of the 51 firms combining geotechnical engineering with field materials testing were in the US or Canada, and 57 of the 65 investigation and drilling firms were outside North America. A buyer splits revenue and margin across these lines before putting a value on the whole.

Professional liability and claims. Advice on ground conditions carries professional liability that can surface years after a project ends. Buyers read the professional indemnity policy, the limits of liability agreed in client contracts and the record of claims and notifications, and a clean record with sensible contract terms supports the value.

End markets. Demand comes from housing, commercial and data center development, transport and water infrastructure, mining and energy, including seabed and route investigations for offshore wind and cables. In the UK, insurers commission subsidence investigations on damaged homes, and in France the seller of building land in an area exposed to clay shrink-swell must provide a preliminary geotechnical study. The buyer checks how much revenue the largest client and the largest end market supply, and a spread across markets steadies the plan.

How we present these to buyers. A buyer pays for what it can see and check. Part of our work in a sale is to present the business as strongly as the facts allow: we show the chartered and licensed engineers behind each report, the rigs and crews with their capital needs, and the frameworks that bring clients back, and we deal with weak points before a buyer finds them and uses them to lower the offer, and a valuation assessment is the place to start, a year or two before a sale.

Who Is Buying Geotechnical Engineering Firms

Activity rose sharply after 2020: we count 43 deals in 2015 to 2020 and more than twice that number in the shorter period since. Private equity firms and their platforms made 16% of the earlier deals and 56% of the later ones, a steeper rise than in field construction materials testing, where the share went from 36% to 62%. The targets were in 19 countries: 64 in North America (56 in the US and 8 in Canada), 37 in continental Europe across 11 countries (12 of them in France), 27 in the UK and Ireland, 10 in Asia-Pacific (6 in Japan) and 7 in Australia and New Zealand.

The table shows the six most active buyers; their deals in this segment and their other acquisitions in our TIC database add up to each total.

UES, Terracon and Certerra made all 33 of their geotechnical deals in the US, while RSK Group, SOCOTEC and Ginger CEBTP bought mainly in the UK and continental Europe, so a firm’s location largely decides which of these buyers will call. Four of the six are backed by private equity, while RSK Group remains founder-led and Terracon is owned by its employees. Private equity owners and owner-led groups tend to differ in how they structure payment and in the role they ask a seller to keep; see strategic vs financial buyers.

One buyer’s offer tells you what that buyer would like to pay. Offers from several buyers, made at the same time on the same information, tell you what the business is worth. That is what a sale process does, and it is the work we do for owners: talk to us before you reply to an approach.

Selling a Geotechnical Engineering Firm: What a Run Process Changes

An approach usually comes on the buyer’s timetable, on the buyer’s terms and with one offer on the table, so an owner who answers it alone is negotiating with one party. A competitive sale process changes that in four ways, and running it is what we do for owners.

Several buyers bid at the same time. Private equity firms and their platforms made 56% of geotechnical deals since 2021, and 74 different buyers have been active in the segment since 2015. A private equity-backed engineering platform adding drilling capacity and a TIC group adding ground engineering to its testing work value the same firm on different grounds, and where materials testing carries much of the work, buyers also read the firm against field testing deals, whose EV/Revenue has a middle half of about 0.9x to 1.6x. Offers made in the same week, on the same information, show what the market will pay.

The process sets the terms of engagement. The seller sets the timetable, decides what each buyer sees and fixes the date offers are due, so competition settles the value and the first buyer’s opening figure becomes one number among several.

Every term is negotiated while alternatives exist. Cash at completion, any earn-out and the revenue or margin it is measured on, the share of proceeds a private equity buyer asks you to reinvest, who carries claims on past projects and who pays for run-off cover on your professional indemnity policy all change what you take home. So do the terms for the senior engineers and lead drillers the buyer wants to keep and the conditions it attaches to your framework places and laboratory accreditation, and each of these moves most while a second buyer is still bidding.

The business is ready before the first call. Expect early requests for staff registrations by grade, laboratory accreditation scopes, the rig register with maintenance records, the schedule of frameworks and on-call contracts, revenue and margin split between investigation, design, monitoring and field testing, and the claims and notifications record under your professional indemnity policy. Anything a buyer has to guess at gets discounted, so we build this file with you before the first buyer is contacted.

Why Geotechnical Engineering Owners Work With Us

We advise owners on sales with typical enterprise values between $5M and $100M, as partners of the Globalscope network. We also advise serial acquirers, which is how we know the way their offers are built and where they leave room.

Recent transactions

• Advice to Apave on its acquisitions of ISOCERT and De Duurzame Adviseurs.
• Sale of CKSource, the rich-text editor developer, to PSG via Tiugo Technologies, after a global process that drew several letters of intent.
• Advice to Visma on its acquisition of SaldeoSMART.

“We were impressed with Marcin’s negotiating skills and Aventis’ ability to make things happen.”

Sindre Talleraas Holen, M&A Director, Visma

“Aventis Advisors did the heavy lifting so that our management team could stay focused on our business.”

Wiktor Walc, President, CKSource

Talk to Us

If an engineering platform or a TIC group has asked about buying your geotechnical firm, talk to us before you reply to the approach, agree a price or sign a letter of intent. We run competitive sale processes for owners: we prepare the firm for buyers, approach the engineering and testing platforms, TIC groups and private equity platforms most likely to pay for your rigs, laboratory, registered engineers and framework places, bring their offers to a single deadline and negotiate the terms through to closing. Write to us at marcin.majewski@aventis-advisors.com. The first conversation is confidential. More on how we work is on our M&A advisory for testing, inspection, certification and compliance businesses.

Methodology

The figures cover majority acquisitions of companies whose main business is ground and site investigation, geotechnical drilling, geotechnical design and consulting, geotechnical instrumentation and monitoring, or geotechnical engineering combined with field materials testing, worldwide, since January 2015. Firms combining geotechnical engineering with field materials testing are counted here when geotechnical work leads, and on our construction materials testing and special inspection page when field testing leads. Soil and materials testing laboratories are covered on our construction materials testing laboratory valuation page, and foundation and ground improvement contractors, land and geospatial surveyors and environmental consultancies are left out.

The deals come from the Aventis Advisors TIC deal database, which combines Mergermarket with acquirer announcements and our own research. EV/EBITDA and EV/Revenue use enterprise value (EV), which is equity value plus net debt; EBITDA is earnings before interest, tax, depreciation and amortization. Median deal size uses EV where disclosed, otherwise the disclosed deal value, which is the consideration for the stake acquired; stakes of 51% to 99% count only where an EV is stated. Distressed sales, and multiples outside 1x to 60x EBITDA or 0.05x to 20x revenue, are excluded from the multiples. Most private deals close at undisclosed values, so the deals with a published figure are a small sample. Medians are shown where at least two deals disclose the figure, and ranges where at least ten do. EV/EBITDA is shown where the multiple or the EBITDA was published by the buyer, the seller, filings or a reputable data source; EBITDA derived from a stated margin is excluded. Each deal is counted under the buyer’s group at the time of the deal, and private equity buyers are private equity firms and the companies they owned then.

The construction materials testing column repeats the figures on that page, which shows a median only where at least five deals disclose it.