Engineering and technical consulting firms are known for structured thinking, system design, and problem-solving. But when it comes to succession, many firm owners find themselves with:
- No clear successor
- No valuation or exit roadmap
- And no time to think about the future while juggling delivery and compliance
It’s not because they lack the intelligence or intent. It’s because most engineers are too embedded in delivery to plan their own exit — until it’s urgent.
In Australia, New Zealand and Canada, thousands of engineering SMEs are led by founders in their 50s, 60s or beyond.
Many hold equity privately, run lean leadership teams, and carry client relationships personally.
And in most cases, there’s no structured plan to transfer ownership, leadership, or liability.
That’s where employee-led buyouts (ELBOs) and internal succession planning come in.
Why Succession Is Tricky in Engineering Firms
Unlike pure service firms or asset-heavy manufacturers, engineering consultancies often sit at the intersection of:
- Project-based revenue
- Deep technical expertise
- Key-person client trust
- Professional licensing and compliance
This creates challenges when founders want to step back:
1. Key-Person Dependency
Clients are used to dealing with you — and may not stick around post-sale.
2. Professional Liability & Licensing
Leadership transitions affect sign-off authority, compliance oversight and certification.
3. Team Continuity and Culture
You’ve built a culture of rigour, quality and delivery — hard to preserve in an external sale.
4. Modest Exit Multiples
Engineering consultancies often sell for 3–5x EBITDA — which feels low for a life’s work.
These issues mean that traditional trade sales or private equity deals often don’t fit. What founders really want is:
– Continuity for their clients
– Clarity for their team
– Value for their retirement
– And confidence in the next chapter
Why Internal Buyouts Work for Engineering Firms
ELBOs and MBOs give you all four.
Here’s why this model works particularly well in technical consultancies:
1. Technical Leadership Already Exists
Your Associate Directors, Principals or Project Leads are already running major parts of the business. They know the delivery model, the clients, the systems.
2. Strong Margins and Predictable Pipelines
Consultancies with public sector, infrastructure or multi-year client contracts can structure vendor-financed or bank-backed exits with less volatility.
3. People Are the IP
Selling the business to your own leadership team means keeping the IP, the team, and the brand in alignment.
4. Avoiding Culture Clashes
External buyers may push aggressive growth, short-term margins, or introduce bureaucracy — often at odds with your firm’s ethos.
Real Case Snapshot (Anonymised – Australia)
Business: Environmental and civil engineering consultancy working on infrastructure and mining approvals
Size: ~$5M revenue, 28 staff, 3 principals
Challenge: Founder (early 60s) wanted to step back from full-time involvement, but retain brand integrity and team structure.
Solution:
- 65% of the business sold to 2 internal directors via vendor finance
- Shareholder agreement updated with voting rights, distributions and leadership roles
- Coaching support for new Managing Director
- Founder retained Chair role and oversight of strategic clients
Outcome:
- Continuity of clients and cash flow
- Smooth leadership handover over 18 months
- Founder fully exited and business retained all senior staff
Source: Blue Harbour Capital engagement (anonymised)
Illustrative Example (Canada – Composite Scenario)
A specialist structural engineering firm in Ontario, known for its work in municipal buildings and heritage restorations, was preparing for the founder’s retirement.
Rather than sell to a national firm — which would likely centralise services and close the local office — the founder engaged a transition advisor to explore internal options.
Three senior engineers took over ownership through a staged buyout. A discretionary trust was created to allow high-potential staff to join the ownership pool over time. Governance rhythms and leadership coaching were implemented to support the transition.
What’s an ELBO — and How Does It Work?
An Employee-Led Buyout (ELBO) is a structured succession plan in which the founder transitions ownership to internal leaders or employees over time.
The deal is usually funded through:
- Vendor finance (payments made to the founder over several years)
- Business cash flow (using project earnings to fund equity purchases)
- Bank lending (often secured against contracts, receivables, or retained earnings)
- Employee trusts or share schemes (for team-wide ownership models)
Most successors don’t need upfront capital — they need a structure and support.
Why Founders Like You Are Choosing This Path
“My team deserves the chance to own this.”
They’ve earned your trust. Now give them the structure to lead.
“I don’t want to sell to a corporate group and lose our culture.”
You can exit without compromising values, people or clients.
“I still want to see the business grow — even if I’m not driving it.”
ELBOs allow phased exits, board roles or mentoring positions.
“I want to be paid out fairly — not rushed or discounted.”
Structured deals protect your payout while giving successors time to grow.
How Blue Harbour Capital Supports Engineering Transitions
We help founders of technical firms transition smoothly through:
- ELBO and MBO structuring
- Business valuation and scenario modelling
- Shareholder agreement design and team alignment
- Post-deal coaching, governance and KPI frameworks
- Legacy, culture and client retention planning
We’re not buyers.
We’re not investors.
We’re here to help you exit with continuity and confidence.
Five Steps to Start Your Succession Plan
- Clarify your goals
Do you want a full exit? A staged handover? A board seat? - Assess your team’s capability
Who could step up — and what support would they need? - Get a business valuation
Consider project risk, client concentration, and recurring work - Explore deal structures
Vendor finance, profit-linked buy-ins, or trusts can be tailored - Plan for post-deal success
Coaching, communication, systems and accountability rhythms
Let’s Talk Succession in Engineering & Technical Services
You’ve built something rigorous. Respected. Resilient.
Now let’s build the transition to match.
Contact Blue Harbour Capital for a confidential succession consultation.