The Cost of Waiting: Early Succession Planning for AEC Firms

A $15M structural engineering firm delayed succession until the founder was 67. The firm sold at 5.0x EBITDA, 20% below market. Five years of earlier planning would have yielded 6.5x and an additional $4M in enterprise value.

That is not an outlier. That is the cost of waiting.

Here is what the data shows.

The average age of principals at architecture and engineering firms is 59. More than 40% of AEC firm owners plan to retire within the next 10 years. Yet many firms still treat succession as a future problem.

By the time founders react, three things have usually happened:
1. The second tier of leadership has departed
2. Backlog softens
3. The buyer pool sees the founder dependency in diligence

Each of those compresses multiples. Combined, they cost the founder 20 to 30% of enterprise value.

The firms that clear premium multiples in our market did the opposite. They began preparation 3 to 5 years before going to market. They institutionalized client relationships. They normalized owner compensation. They built a credible second-tier team. Stonemill closed one $30M civil engineering firm at 9.0x EBITDA by doing exactly this work in the 18 months before market.

The pattern is not subtle. Founders who time their firm clear above market. Founders who try to time the market settle for what they can defend on the day.

If you are 5 to 10 years from a decision, the work starts now.

If you want a read on where your firm sits on the readiness curve, message us. The conversation worth having is the one you have before you have to.

#AEC #MergersAndAcquisitions #SuccessionPlanning

Sources: Patrick Neal, "Navigating the Next Decade," Stonemill Partners (August 2025).