EFCG serves on a retainer basis to 50 a/e/c firms (small to large) to provide financial and strategic advice.
PEER BENCHMARKING ANALYSIS
EFCG has performed over 1000 Peer Benchmarking Analyses (PBA) for it’s a/e/c clients, comparing the client’s performance on roughly 100 key performance indicators with those of 20 – 30 other comparable peer firms. In this analysis management can far better assess where they are strong and where they are weak, and with EFCG’s advice, better understand what they need to do to become more profitable, more successful, more resilient, and therefore more valuable. The PBA can also be helpful in assessing the strengths and weaknesses of potential acquisition candidates during a due diligence process.
INTERNAL OWNERSHIP TRANSITION STRATEGIES
One of the greatest challenges to employee-owned a/e/c firms is to plan and execute a sustainable and smooth ownership transition. EFCG specializes in assisting employee-owned a/e/c firms to meet their internal ownership transition needs, through a consideration of increased profitability, more efficient management of their balance sheets (assets and liabilities), more strategic approach to their internal valuation, and better management of their growth. See OCCP and Capital Flows Analysis to better understand how we determine adequacy of capital requirements, the management of profitability, growth needs, bonus policy, capitalization, and balance sheet management.
EFCG specializes in putting together presentations to a/e/c Board of Directors, Executive Management Team Meetings, Strategic Planning Sessions, and/or Annual Shareholder Meetings. This is usually combined with a Peer Benchmarking Analysis, and a strategic review of the firm’s objectives. It can include a one-on-one interview of key management, a discussion with the CEO or Board of their key issues, questions, and concerns. This process enables EFCG, as independent experts in this industry, to understand the goals of management and ownership, and draw upon our experience and the comparative performance metrics, to provide supportive advice and recommendations for improvement moving forward.
OWNERSHIP, COMPENSATION, AND CAPITALIZATION PLAN (OCCP)
EFCG refers to the analysis of a firm’s ownership structure and stock valuation alternatives, as being part of a larger, interrelated set of issues, which include issues of owners’ compensation, governance, and capitalization or an “OCCP”. The reason for looking at all of these elements together is that they are so critically interrelated. As an example: the decision as to how best to transition ownership, and at what valuation, will also likely impact capitalization, and therefore the firm’s capacity to provide adequate capital to finance its growth (including acquisitions), as well as to present a meaningful balance sheet to prospective customers. We believe it is not possible to properly consider any one of these segments, without considering how they all work together to provide a healthy framework by which to properly compensate, adequately transition ownership, capitalize for organic and acquisitive growth, and govern the firm for success.
CAPITAL FLOWS ANALYSIS (CFA)
A tool to use in board meetings, executive management meetings, strategic planning meetings, etc., to illustrate and quantify a firm’s 5-year capital plan.
CFA helps to answer questions in regards to a firm’s ability to:
– Pay retiring shareholders: At what value? Over what period of time?
– Fund organic growth: How much working capital will it require?
– Is it possible to make acquisitions? If so, how many and at what size?
The CFA is a comprehensive and easily understood, one-page analysis that quantifies these key sources and uses of capital in an a/e/c firm. By quantifying these sources and uses, the CFA converts abstract and unquantified discussions about future capital needs into more finite terms (but without being so complex that only a financial expert can understand), which can then be used to establish a more focused 5-year plan for your firm.
EFCG provides two principal publications, accessible on a subscription basis.
Semi-Annual Industry Overview: Twice a year we provide the EFCG Industry Overview, a 10 – 20 page report and analysis of the a/e/c industry, covering both overall and more detailed industry and sector analysis and forecasts, along with 5-10 key topics and issues we see relevant to the company leaders to help them with strategy and planning issues and challenges, valuations, trends, capital markets issues, and an analysis of the M&A activity, trends and valuations.
Public Market Analysis: For the past 25 years, we have been providing quarterly updates on the financial reports of the publicly traded a/e/c firms including roughly 20 US and 20 non-US firms. Everything from their growth, profit, and KPI’s; their valuations relative to key financial benchmarks; their projections and other helpful performance and valuation metrics; also tracking their historical trends over 5-25 years.