Target Information

CHA Consulting, Inc. (CHA) is a distinguished full-service engineering, design, consulting, and program management firm headquartered in Albany, NY. The company specializes in providing a comprehensive array of technology-enabled services across various sectors, serving public, private, and institutional clientele. Key markets include government, manufacturing, transportation, utilities, water resources, commercial, and education. With an impressive portfolio, CHA has positioned itself as a leader in delivering innovative solutions that address complex infrastructure challenges.

Since its partnership with First Reserve in 2018, CHA has experienced significant growth, including a doubling of both its workforce and revenue during this period. The firm has pursued a strategic expansion strategy that involved acquiring nine companies, thereby enhancing its footprint in the Southeastern U.S. and diversifying its service offerings. Looking ahead, Jim Stephenson, the current President & CEO, along with the existing executive management team, will continue to spearhead CHA's growth initiatives under the new ownership of H.I.G. Capital.

Industry Overview in the United States

The engineering and consulting industry in the United States is experiencing robust growth, driven by significant infrastructure investments and increasing demand for sustainable solutions. With a projected value of approximately $338 billion by 2025, this sector encompasses various services, including engineering design, project management, and environmental consulting. As federal and state governments allocate substantial funding towards transportation, utility upgrades, and urban development, firms like CHA remain pivotal in implementing these critical projects.

Furthermore, the AEC (Architecture, Engineering, and Construction) sector is regenerating a strong focus on technology integration, particularly in the realms of digital design and project management methodologies. The adaptation of Building Information Modeling (BIM), advanced analytics, and real-time project tracking contributes to enhanced project delivery and client engagement. This evolving landscape positions innovative firms, equipped with substantial technical capabilities, at the forefront of industry competition.

Additionally, ESG (Environmental, Social, and Governance) criteria are shaping strategic decision-making processes across all sectors—including engineering. Companies prioritizing sustainability are increasingly rewarded with new business opportunities and public support. This trend not only benefits established players like CHA but also attracts new entrants looking to leverage sustainable practices as a competitive advantage.

As several sectors continue to rebound post-pandemic, the engineering consulting market stands out due to its critical role in economic development and infrastructure resilience. CHA, with its extensive experience and adaptability, is well-placed to capitalize on emerging opportunities amid this transformation.

Rationale Behind the Deal

The acquisition of CHA by H.I.G. Capital aims to leverage the firm’s existing strengths while facilitating further growth and expansion. This partnership is anticipated to enhance CHA’s operational capabilities by providing access to H.I.G.'s considerable financial and operational resources. The backing of a leading global alternative investment firm should enable CHA to pursue additional strategic acquisitions and amplify its service offerings across North America.

Moreover, this transaction marks a significant endorsement of CHA's successful growth trajectory established during its collaboration with First Reserve. By aligning with H.I.G., CHA aims to further refine its strategic vision, expanding its market presence and enhancing its value proposition to clients across diverse sectors.

Investor Information

H.I.G. Capital is a foremost global alternative investment firm, managing approximately $60 billion in capital. With a strategic focus on middle-market companies, H.I.G. employs a flexible and operationally focused approach to investments. Established in 1993 and headquartered in Miami, the firm has a reputable history of capital deployment across various sectors—from management buyouts to infrastructure investments.

The firm's portfolio encompasses over 100 companies worldwide, with combined sales exceeding $53 billion. H.I.G. Capital’s established track record in supporting management teams and fostering growth positions them as a significant partner for CHA in its next phase of development. Their reputation for driving operational improvements and aligning resources for scalable growth complements CHA's ongoing strategic objectives.

View of Dealert

The acquisition of CHA by H.I.G. Capital appears to be a strategic and highly promising investment for both parties involved. H.I.G.'s extensive expertise and capital support may greatly enhance CHA's operational capabilities and growth trajectory, enabling the firm to capitalize on market opportunities more efficiently. Additionally, H.I.G.'s strong focus on facilitating the expansion of its portfolio companies aligns well with CHA's ambitious goals.

Moreover, CHA has demonstrated its resilience and ability to scale successfully under previous ownership, effectively doubling revenue and employee numbers while expanding its geographic reach. This established performance record, combined with H.I.G.'s resources, provides a solid foundation for further growth, particularly in the evolving AEC sector.

As the engineering sector shifts towards more sustainable, technology-driven solutions, CHA's positioning complements growing market demands. H.I.G.'s support could enable the firm to harness new technologies and service innovations, enabling them to maintain a competitive edge.

In conclusion, while each deal carries inherent risks, the alignment of CHA's strategic vision with H.I.G.'s operational expertise and capital resources creates a favorable outlook for continued growth and success. Observers of the market should monitor the execution of this collaboration as CHA seeks to expand its industry-leading capabilities.

View Original Article