HRI, Inc. is a diversified construction company with expertise in highways, airports, bridges, water and wastewater treatment facilities, asphalt paving and site development across central and western Pennsylvania and surrounding markets. The company runs six hot-mix asphalt plants that support its paving and construction operations. As part of GOH, the combined entity expands capabilities and deepens its regional presence while continuing the standards of performance that have long defined both businesses. 

Hunter Creech, Colas Inc. Vice President – Mergers & Acquisitions, shared, “Working with Founders Advisors was a valuable experience from start to finish. They added expertise and insights throughout the process, and they kept focus on our strategic objectives. We’re pleased to have found the right partner in Glenn O. Hawbaker to carry forward the legacy of HRI.” 

Dennis Coker, Managing Director at Founders Advisors, remarked, “It was a privilege to advise Colas on this transaction. HRI has built a strong reputation for quality, safety, and reliability in the infrastructure markets it serves. We’re proud to have helped facilitate this next chapter with Glenn O. Hawbaker, a company that shares those same values and brings the resources and vision to take both divisions to new heights.” 

About HRI, Inc. HRI, Inc. is an established provider of heavy civil construction and infrastructure services, serving public and private sector customers across Pennsylvania and the surrounding region. Its capabilities span highway and bridge construction, asphalt paving, site development, and related infrastructure services. HRI is known for their commitment to safety, quality, and long-term customer relationships. HRI is headquartered in State College, PA. 

About Glenn O. Hawbaker, Inc. Glenn O. Hawbaker, Inc. is a leading heavy and highway contractor with over 70 years of experience, serving both private and public sector customers across Pennsylvania, Ohio, West Virginia, Maryland, and southern New York. Founded in 1952 by Glenn and Thelma Hawbaker in State College, PA, GOH provides a wide range of services including site development, highway and bridge construction, asphalt paving, aggregate production, concrete work, and engineering design services. The company operates more than 24 quarries and 8 asphalt production facilities and employs over 1,000 professionals. GOH is headquartered in State College, PA. 

About Founders Founders Advisors brings deep sector expertise in Construction Materials and Building Products, supported by broader experience across Industrial, Technology, Healthcare, and Consumer markets. If you are exploring a potential sale or evaluating strategic options, please feel free to reach out to our team. 

To provide securities-related services, certain principals of Founders Advisors, LLC are licensed with Founders M&A Advisory, LLC, member FINRA and SiPC. Founders M&A Advisory, LLC is a wholly owned subsidiary of Founders Advisors, LLC. Neither Founders Advisors nor Founders M&A Advisory provide investment advice. For more information, please visit www.foundersib.com. 

The firm also announced a strategic reorganization designed to enhance client service and position the firm for continued growth.

As part of this reorganization, Founders has formed the Strategic Partnerships Group, led by Zane Tarence, Managing Partner. The Strategic Partnerships Group is responsible for driving and integrating all prospect-generating activities across the firm, including firm-wide business development, strategic partnerships, events, CEO networks, and centers of influence relationships. Mr. Tarence will report to Wesley Legg, Founders’ President.

Gene Bazemore, formerly Head of the Industrial Group, has been promoted to Head of Investment Banking. In this new role, Mr. Bazemore will oversee all investment banking groups, ensuring consistent delivery of gold-standard M&A advisory services, driving strategic sector coverage, and overseeing talent development across the firm’s deal execution capabilities. Mr. Bazemore will also report to Mr. Legg.

“This reorganization reflects our continued commitment to serving founders with excellence at every stage of their journey,” said Mr. Legg. “By forming the Strategic Partnerships Group under Zane’s leadership, and elevating Gene to lead our investment banking operations, we are strengthening our ability to build relationships, execute transactions, and deliver outstanding outcomes for the business owners who trust us with their legacy.”

The firm also announced several key leadership appointments within its industry groups. John Sullivan has been promoted to Head of the Industrial Group, succeeding Mr. Bazemore. Chris Weingartner has been promoted to Head of a newly formed Enterprise Group, which combines the firm’s Technology, Business Services, and Healthcare practices. Wayne Vacek will continue in his role as Head of the Consumer Group.

“These changes position Founders for our next phase of growth,” said Duane Donner, Founder and CEO of Founders Advisors. “We have an exceptional team of professionals, and expanding our partnership recognizes the contributions and leadership that have been instrumental to our success. In addition, our new organizational structure allows us to sharpen our focus on both adding value to business owners pre-transition and maintaining gold standard deal execution. We believe this will better serve the unique needs of family and founder-owned businesses – not only during their transaction, but in building the bridge to get there and in protecting their legacy long after.”

About Founders Advisors

Founders is a merger, acquisition, & strategic advisory firm serving middle-market companies. Founders focuses on helping companies across technology, business services, consumer, energy, industrial, and healthcare industries. Founders’ skilled professionals, proven expertise, and process-based solutions help companies access growth capital, make acquisitions, and/or prepare for and execute liquidity events to achieve specific financial goals. In order to provide securities-related services discussed herein, certain principals of Founders Advisors, LLC are licensed with Founders M&A Advisory, LLC, member FINRA and SIPC. Founders M&A Advisory, LLC is a wholly owned subsidiary of Founders Advisors, LLC. Founders Advisors, LLC does not provide investment advice. For more information, please visit www.foundersib.com.

Graham Barnett

Graham Barnett is an Analyst for Founders Advisors. Prior to joining Founders, Graham interned at Brasfield & Gorrie in 2023, and Founders Advisors in 2024. Originally from Auburn, AL, Graham graduated magna cum laude from Auburn University with a degree in Finance. Outside of the office, Graham enjoys spending time at Lake Martin, fishing, and spending time with family and friends.

Noah Coomes

Noah Coomes is an Analyst for Founders Advisors. Prior to joining Founders, Noah interned as a Summer Analyst at William Blair & Company, Regions Financial Corporation, and Colibri Group. He graduated summa cum laude from Auburn University with a B.S. in Finance. Outside of the office, Noah enjoys playing golf, hunting, fishing, and spending time with friends and family.

Elic Gum

Elic Gum is an Analyst for Founders Advisors. Prior to joining Founders, Elic completed internships at Broadwing Capital and Sanders Morris Harris. Originally from Dallas, TX, Elic graduated summa cum laude from Samford University with a degree in accounting and finance. Outside of the office, Elic enjoys spending time with friends and family, hiking, and reading.

David Moore

David Moore is an Analyst for Founders Advisors. Prior to joining as an analyst, David interned as a Summer Analyst at Founders. Originally from Trussville, AL, David graduated summa cum laude from the University of Alabama with a degree in Finance. Outside of the office, David enjoys reading, being outdoors, and spending time with his friends and family.

James Nichols

James Nichols is an Analyst for Founders Advisors. Prior to joining Founders, James completed internships with Performance Trust Capital Partners and Featheringill Capital. Originally from Birmingham, AL, James graduated from the University of Georgia’s Terry College of Business with a degree in Finance. Outside of the office, James enjoys playing golf, being outdoors, and spending time with friends and family.

We are thrilled to have Graham, Noah, Elic, David and James join our team. Their diverse backgrounds and expertise will undoubtedly enhance our capabilities and drive our continued success.

We also touch on insights from industry experts, including:

“The share of M&A deals with founder owned companies as targets reached 61.5% in Q1 2023, up from 53.8% in Q4 2020. Their share of M&A value increased to 43.5% from 31.3% during the same span. Founder owned companies have always been attractive targets for corporate and sponsor acquirers for a variety of reasons, the latest being the low inventory of motivated sellers in the current environment.” – PitchBook Data, Inc.

“Retail has changed a lot in the last 5 to 10 years, and the change over the next 5 to 10 years is likely to be just as significant. Customers are demonstrating preference for multichannel offerings, convenience, value and selection, and up to this point, for most, it’s proving challenging to provide all of these things at attractive economics.” – John Rainey, Walmart CFO and EVP

If you or someone you know has questions regarding the above, or the general consumer marketplace, please feel free to contact Nathan Kelly or Wayne Vacek, Director’s of Founders’ Consumer Practice.

For our relationships in the early childhood education industry, we put together a summary of the latest Bright Horizons quarterly earnings report. We always recommend our clients listen to public company quarterly earnings conference calls, which can be found at this link for Bright Horizons. Public companies are required to disclose their performance, outlook, and growth strategy on these calls, and private owners can listen in to gain knowledge and insight for managing their own businesses. We took away several key points for early education providers:

1) Keep on touring—2023 looks promising

• “We expect our centers to grow roughly 15% to 20% for 2023”
• “2023 average price increases are 6%-7% on average”
• “Encouragingly, the progress we have made over the course of the last year in classroom staffing has allowed our center directors to conduct significantly more in-person tours over the last 6 months”

2) The road to recovery has been bumpy

• “Our recovery hasn’t been and won’t be linear, but we continue to make solid progress in recovering from the effects of the pandemic”
• “In 2022, we saw our turnover rates, which peaked in 2021, return to pre-pandemic levels alongside an uptick in formerly employed teachers returning”
• “The last 3 years have been some of the most challenging our sector has ever faced, beginning with the temporary closure of most of our centers in 2020, followed by the unprecedented disruption of staffing, to the unpredictable and recurring coronavirus variants that contributed to an uneven recovery in late 2021 and into 2022.”

3) Staffing is still difficult, but improving

• “Overall, for 2023, the average wage will increase by 7-10%”
• “We expect there will be some further labor fallout as benefit programs roll off.”
• “We know once someone stays with us the first 100 days, they are going to stay with us much longer.”

4) Drop-in care may be the next big thing

• “In 2022, we expanded [Drop-in care] to more than 15 new communities. We introduced pet care as an additional Back-Up use case. And we have academic tutoring.”
• “We couldn’t be more excited about the opportunity to grow Back-Up Care by double-digits over the next several years.”

5) Enrollment was up 6% year-over-year for 2022

• “US enrollment increased 6%, with growth of 10% in the infant and toddler age groups and low single-digit growth in our preschool programs.”
• “Centers in the largest metro areas like Atlanta, the Bay Area, New York City and Seattle, showed strong year-over-year enrollment gains.”
• “We ended up on average 60%-65% full for the year, with our best centers at 70%-80% full”

If you or someone you know has questions about transitioning company ownership, in part or in whole, please contact Nathan Kelly, Director of Founders’ Consumer Practice.

As a part of our interview series, we have a Q&A session with Vik Thapar, Managing Director of Cypress Growth Capital, LLC. With over 20 years of experience in spanning venture capital, private equity and information technology consulting, Vik gives business owners insights into royalty-based growth capital.

If you or someone you know has questions about the MarTech sector, valuations, a potential transaction process, please feel free to reach out to Brad Johnson at bjohnson@foundersib.com.

Market Anticipation of a Recession

• The tenor of the market has become defensive as the economy slows
• If the economy is, in fact, heading into a recession, the depth and length is an open question

Federal Reserve Raising Interest Rates to Curb Inflation

• The US Federal Reserve continues to aggressively move to curb inflation
• The benchmark fed funds rate sits at 4.25% – 4.50%, a 15 year high, with rates expected to top 5% by mid-2023
• While core inflation has slowed modestly, it has broadened into more persistent areas that will require a further slowdown in economic growth

Heightened Investment Scrutiny

• Market conditions are prompting both strategic and private equity buyers to carefully consider which M&A processes they participate in
• Defensibility of market position, recession “resistance” and the impact of a future “normalized” commodity environment are top of mind for buyers
• Close attention paid to quality of adjustments and inflationary impacts to EBITDA

Market Equilibrium – Valuations

• There is approximately $3.3 trillion of dry powder available to deploy by private equity and credit funds
• The demographics of aging baby boomers and owners deciding to sell in the face of the challenges of operating a business in the current economic and geo-political environment have fueled the supply of companies for sale
• So, while deal volume has slowed, valuations remain robust YTD

If you or someone you know has questions about anything discussed, or the general private capital marketplace, please feel free to reach out to Ken Hirsch, Managing Director of Founders’ Capital Solutions Practice.