Zweig Index: Atlas Technical Consultants Company Spotlight

Feb 01, 2023

According to IBIS World, there are 74,000 architecture firms competing for an annual market size of roughly $55 billion, 138,000 engineering firms competing for $260 billion, and 63,000 environmental firms competing for $25 billion. The industry is highly fragmented, with 99 percent of the firms within these categories being privately held with no public reporting requirements. This means that unless you know where to look and what to look for, reliable financial data and metrics relating to the financial health and direction of the industry can be scarce. Zweig Group reports annually on these matters via Financial Performance and Valuation Reports, where we compile survey inputs from privately held companies and present the data in a way that is digestible and easily applicable to firm leaders. We also believe that tracking and reporting on the financial standing of some of the industry’s leading firms, publicly traded firms, will allow our readers to have another digestible form of information that will equip them with a greater understanding of the state of the industry. This is why we have decided to reinstate and enhance the Zweig Index, which will report on 11 of the AEC industry’s leading firms on a monthly basis.

This, our first installment of the Zweig Index, will detail the financial standing of a firm that won’t be on the Zweig Index much longer as they just entered into a definitive agreement to be purchased and taken private by GI Partners. This report will detail the financial standing of Atlas Technical Consulting (ATCX) as of their Q3 2022 Report.

Zweig Index – Company Spotlight: Atlas Technical Consultants

*Stock prices as of market open 2/1/23.

Key End Markets

  • Transportation
  • Healthcare
  • Education
  • Industrial
  • Commercial
  • Water
  • Government
  • Power

Financial Highlights

  • TTM gross revenues as of Q3 2022 increased from $539 million to $599 million, showing 11.2 percent growth over FYE 2021 performance.
  • TTM net service revenue as of Q3 2022 increased from $435 million to $475 million, showing 9.3 percent growth over FYE 2021 performance.
  • Adjusted EBITDA from continuing operations increased from $73 million to $84 million, which is 17.7 percent of NSR.

  • The company’s gross revenues by market segment are evenly split between the public and private sectors.

  • The majority of Atlas’ revenues were derived from its environmental services division (38 percent), followed by testing, inspection and certification (32 percent), engineering and design (15 percent), and construction management (15 percent).

  • As of September 30, 2022, Atlas had a total backlog of $864 million, which equates to roughly 19 months of work for the firm’s current labor force.
  • Backlog increased from $808 million as of FYE 2021 to $864 million as of Q3 2022, showing a 6.9 percent increase. 

Balance Sheet

  • The firm’s cash and cash equivalents accounts decreased 11.6 percent, from $10.7 million to $9.5 million.
  • Billed and unbilled receivables totaled $170 million as of September 30, 2022.
  • There is a total of $515.3 million in long-term (and current portion of long-term) debt on the balance sheet as of September 30, 2022.
  • Current ratio increased from 1.91 as of December 31, 2021 to 2.05 as of September 30, 2022.
  • Quick ratio ( (cash + receivables) / current liabilities ) decreased from 1.81 as of December 31, 2021 to 1.91 as of September 30, 2022.
  • The firm had a negative debt to equity ratio of -4.12, meaning that the debts of the firm exceeded the assets on the balance sheet.

Valuation Metrics

Enterprise value measures a company's total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt and any cash or cash equivalents on the company's balance sheet.

Atlas Technical Consultants, Inc. (Nasdaq: ATCX) announced on January 31, 2023 that it has entered into a definitive agreement to be acquired by private investment firm GI Partners in an all-cash transaction valued at approximately $1.05 billion, including outstanding debt.

  • The EV proposed by GI Partners is approximately $1.05 billion.
  • EV/TTM NSR is 2.2X.
  • EV/2021NSR is 2.4x
  • EV/TTM Adjusted EBITDA is 12.5x.
  • EV/2021 Adjusted EBITDA is 14.3x.
  • EV/Backlog is .9x.

Risks (from 2021 10k Filings)

  • Outbreaks of communicable diseases, including the ongoing global pandemic related to COVID-19, have had an adverse effect on our business, financial condition and results of operations and could in the future have, directly or indirectly, a material adverse effect on our business, financial condition and results of operations. The duration and extent to which this will impact our future financial condition and results of operations remains uncertain.
  • Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel.
  • Demand from clients is cyclical and vulnerable to economic downturns. If the economy weakens or client spending declines, our financial results may be impacted.
  • Rising inflation, interest rates and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed price contracts.


  • Infrastructure Renewal of assets overdue for improvement, replacement, and connectivity to ensure safety and reliability.
  • Environmental & Climate Actions to sustain, remediate, and strengthen natural and built assets and support the transition to a low carbon economy.
  • Expand and enhancing technical service offering and geographic footprint through M&A transaction in a highly fragmented industry.
  • Capitalizing on favorable end market fundamentals.

Recent Acquisitions


As of September 30, 2022, Atlas had the tenth largest market capitalization and enterprise value of the 11 firms on the Zweig Index. The firm had a large debt balance of $515.3 million with an average effective interest rate of 9.2 percent. Interest expense, inclusive of amortization of deferred debt issuance costs, in the consolidated financial statements for the nine months ended September 30, 2022 was $34.4 million and the firm had an operating income of $31.3 million with $9.5 million in cash reserves. In the near term, the firm will be able to cover its liabilities with a current ratio of 2.05, and they have a growing backlog figure of $864 million that should provide enough work for their current labor force for roughly 19 months. The firm has been aggressively pursuing acquisitions with seven completed acquisitions in the last three years, coming to an estimated aggregate transaction value of roughly $151.9 million. This has allowed its revenue and adjusted EBITDA figures to grow rapidly, along with the outstanding debt balance, which was included in the $1.05 billion purchase price from GI Partners.

Affiliates of Bernhard Capital Partners, which own approximately 43 percent of the outstanding Atlas common stock, have entered into a voting agreement in support of the transaction which is expected to close in the second quarter of 2023. Under the terms of the transaction, Atlas shareholders will receive $12.25 per share in cash, which represents a premium of approximately 124 percent over the Company's unaffected closing share price of $5.47 on January 30, 2023.

With additional financial backing to cover debt obligations and fund expansion in a bullish AEC sector, Atlas is in a great position to continue down the growth path via both acquisitions and organic means. We at Zweig Group look forward to seeing how industry leaders like Atlas, BCP, and GI Partners continue to shape the landscape of the AEC industry.

Please feel free to reach out with any thoughts, comments, or questions at I welcome and encourage open dialogue that will help my team and I elevate the industry.

About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.