Raising the Bar

Goodwyn, Mills and Cawood Sets $80 Million Goal

February 2016
By David Zaslawsky    
Photography by Robert Fouts

In the mid-1990s Goodwyn, Mills and Cawood executive David Reed wrote to the Engineering News-Record to be included in that publication’s top 500 list of fee revenue. The publication wrote back that GMC did not qualify.

Now the Montgomery-based firm has been on the nationwide list of the top 500 engineering firms by fees that also include architectural fees. GMC has actually been on the list for the past 10 to 12 years – first being ranked in the 400s and now it’s No. 270.

That’s a nationwide list. “Not a bad achievement for a few years,” said Reed, who is chairman of the firm’s board of directors and executive vice president.

That 270th ranking could climb in the next three to five years as the company’s growth potential is nearly unlimited. “We have goals the next five years to get up to the $70 to $80 million range,” Reed said, referring to the company’s fees. With expected revenue last year to reach $53.6 million – the $80 million revenue goal is a 50 percent increase in the next five years.

To reach that target, the firm would combine organic growth with acquisitions as well as growing disciplines and growing geographically. The opportunities are plentiful. The firm already has 10 offices in five states, including the hotspots of Nashville and Atlanta.

Franklin, Tennessee, a suburb of Nashville, “is a huge growth area,” said Goodwyn, Mills and Cawood CEO Bill Wallace. “They are building almost one new high school a year and two grade schools every year. With that growth comes infrastructure improvements; geo technical engineering; civil engineering; transportation engineering; electrical engineering. You have architecture that goes into that. Architecture goes into interior design and construction administrations – just a ripple effect.” The Nashville population is projected to double in 20 to 25 years, according to GMC, which currently has 29 people in its Nashville office.

The firm is “not any less enthusiastic about Atlanta or South Carolina,” Reed said. The firm acquired an architectural company in South Carolina and has what Reed called “a solid base of operations.” GMC has worked on university projects as well as water and sewer projects for municipalities. He hopes to add transportation projects as well as expand into the federal government market. GMC is working on a $52 million football operations facility for Clemson University.

GMC is looking at acquiring a Georgia firm with three offices in the state. “Atlanta is starting some pretty rapid economic development,” Reed said.

Expansion to Florida is likely in the future and GMC has considered opening offices in Tallahassee and Jacksonville, but would focus on integrating any new acquisitions first. “A lot of folks, including us, made mistakes back during the boom years of the last decade where we reached out and grabbed too much too quickly,” Wallace said. “My philosophy is, and I think the board’s for the most part is, let’s get that (new Georgia offices) integrated first and let’s make sure that is a part of who we are and that the cultures are similar and the DNA is similar. Once we do that, then we move on to other opportunities, because you can bite off more than you can chew.”

GMC provided architecture, civil engineering, environmental, interiordesign, landscape architecture and surveying for the Auburn UniversitySouth Donahue Residence Hall, parking deck, wellness kitchen andParkerson Mill Creek Stream restoration project. Photo courtesy of GMC.

GMC served as the project architect for Park Crossing High School in EastMontgomery. The firm, which also provided civil engineering, interior design,landscape architecture and construction administration services, is currentlyworking on the third phase of the project for Montgomery Public Schools.Photos courtesy of GMC.

Wallace said that it was critical to have a leader within GMC to oversee a new acquisition and the company has not always done that. He acknowledged that some of the firm’s acquisitions “haven’t been integrated quite successfully.”

A Base Realignment and Closure of military facilities, which could happen in 2017 or 2018, “causes a lot of disruptions and whenever there is disruption, there is money spent to try to organize that disruption,” Wallace said. The firm does have “some volume” in federal government projects, but “would like to increase that activity as the market recovers.”

Another discipline with a huge upside is oil and gas. “If you catch it at the bottom end of a cycle and buy a firm that has an expertise in that, it potentially gives you both geographic reach and discipline reach,” Wallace said.

Adding an oil and gas discipline would complement a lot of other disciplines the firm has, including acquiring the right of way for pipelines and engineering, according to Reed.

Wallace talked about the BP oil spill settlement and that GMC could potentially acquire a firm or add experts in coastal restoration that “fit to our existing environmental group” and add “gravitas.” Those experts or a firm would have “relationships with the players involved (in that area) to spend that money,” Wallace said.

There is potential growth – a lot of potential growth – for electric transmission, Wallace said. The company currently does “a minor amount of transmission client work,” Reed said.

GMC lacks a civil engineer for the national market, Wallace said, but “might acquire a small civil engineering firm.” Reed added, “Somebody that already has a client base and that’s their expertise.”

A civil engineer is defined by the firm as working in private development such as subdivisions and apartments while municipal engineers work on projects for cities and towns.

Goodwyn, Mills and Cawood is looking for increased revenue from two subsidiaries: Clearwater Solutions, which has 110 employees, and Headwater Solutions, which does not have employees. Clearwater Solutions, which started five to six years ago, does maintenance for city utility systems such as water and sewer that do not have their own departments. Many of the clients are smaller towns and communities, but GMC does handle water and sewer for Hoover.

Meanwhile, Headwaters Solutions is an environmental company, which acts as a mitigation banker,” Reed said. A developer who wants to get a permit for a highway that goes through a wetland needs to buy wetlands credits from a bank. “We design and manage banks for different land owners,” Reed said.

After all the talk about all the potential growth areas as well as competing for a design-bid on a GE plant; a $75 million sports complex being built; a $40 million project underway for an interchange; and connector road in Huntsville – is the goal of a 50 percent revenue increase over five years just a bit conservative?

“You package your growth so it’s sustainable,” Wallace said. “As Emory Folmar (former Montgomery mayor) used to say: ‘Don’t outrun your headlights.’ You have to make sure that you’ve got an infrastructure built to support that kind of revenue.”

The Montgomery-based firm has grown from 141 employees in 2003 to 431 today, including Clearwater Solutions. That growth includes eight acquisitions. There are 342 employees in the state.

Of course, there are no goals achieved without the “professional and services side of it,” Reed said. “We’re trying to constantly upgrade engineering and architectural professionalism and the product that we produce. We don’t want to lose touch with that.

“At the end of the day – a lot of this is business – but we have to still remember that we’re engineers and architects. Our licenses are based on us being individual engineers and architects and our responsibilities are based on that. Our professional reputation is based on that. We’ve got to keep that in mind – keep our quality up; keep our professionalism up. We have to do good work and keep our clients happy.”