Intelligence
Assessment of Tier-1 infrastructure and environmental platforms. Focus on Operational Alpha and Regulatory Moats.
ERM is the world's largest specialist sustainability consultancy and the primary "pure-play" benchmark for the sector. Under KKR majority ownership (acquired in 2021 at a ~$2.7B valuation), ERM has transitioned from a traditional EHS firm into a strategic advisor integrating C-suite ESG transformation with boots-on-the-ground technical delivery across 40+ countries and 8,000+ professionals.
Its competitive advantage is the "Boots-to-Boardroom" model — ensuring boardroom-level sustainability commitments are technically feasible and verifiable at the asset level. This bifurcated model captures both high-margin strategy mandates from CSOs and CFOs, and high-volume technical remediation, forensics, and engineering work from EHS and Operations directors.
"ERM wins by providing global consistency to multinationals — combining boardroom-level climate strategy with on-the-ground technical execution in a way that creates a defensive moat against strategy-only boutiques and generalist engineering firms." — Gaya Capital Research
FY25 gross revenue reached $1.413B, up from $1.323B in 2023. Revenue quality is shifting positively: long-term MSAs and sticky compliance-driven work now drive a larger share versus project-based boutique exposure. ERM targets firm-wide billable utilization of 75–85%.
Total reported turnover for FY25 was approximately 19.9% — a known pressure point, particularly in Asia-Pacific at 30.2%. KKR's ownership alongside 580 ERM partners as minority investors provides a structural alignment mechanism.
APTIM is a $1.2 billion environmental engineering platform carved out from CB&I by Veritas Capital in 2017 for $755M. The company has since delivered 60% revenue growth (8% CAGR) driven by organic expansion in PFAS remediation, coastal resilience, and federal program management.
"APTIM is a defensible mid-tier environmental services platform positioned in high-growth end markets that benefit from regulatory tailwinds largely insulated from political cycles." — Gaya Capital Research
| Revenue Driver | Political Risk | Risk-Adjusted View |
|---|---|---|
| PFAS Remediation | MEDIUM | State standards create a "California Effect" floor even if federal MCLs are weakened. DoD PFAS funded at ~$1.2B/yr — bipartisan Congressional mandate. |
| IIJA (est. $50–100M) | LOW | Bipartisan passage. Already-appropriated mandatory spending. Republican states protecting their IIJA allocations. |
| IRA-Linked Programs | MEDIUM-HIGH | Zero Republican votes at passage. Budget pressure via DOGE makes IRA a target. Stress-test IRA-dependent revenue in diligence. |
| Core Federal IDIQs (DoD/DOE) | LOW | Non-discretionary compliance mandates. 11-year client retention on groundwater remediation contracts validates stickiness. |
| Scenario | Exit Route | Valuation Range | IRR Estimate |
|---|---|---|---|
| Base Case | Strategic sale to Jacobs, AECOM, Tetra Tech, or Stantec | $1.2–$1.6B (10–12x EBITDA) | 6–10% IRR |
| Secondary | PE-to-PE secondary transaction | $1.4–$1.8B | 8–12% IRR |
| Upside | PFAS acceleration + IIJA peak deployment | $1.6–$2.0B | 12–15% IRR |
McDonnell
Burns & McDonnell is a $7.4 billion titan in the U.S. infrastructure market — 100% employee-owned via ESOP — built on a vertically integrated "Design-Build" engine that captures the entire project lifecycle from advisory through EPC.
"BMcD's utility MSA relationships provide structural access to non-discretionary capital programs without open-bid competition — the most defensible revenue architecture in the AEC sector." — Gaya Capital Research
Atwell is one of the most compelling PE-backed infrastructure services platforms in the country — ascending from a regional Midwest surveying firm to ENR Top 70 with $424.7M in confirmed 2024 revenue and management-guided targets exceeding $500M in 2025, representing 30%+ year-over-year growth.
"Atwell's revenue leads construction cycles by 12–36 months, providing forward visibility and avoiding the capital intensity and margin compression of construction execution." — Gaya Capital Research
Ulteig is a preeminent utility-centric infrastructure platform with 1,500+ employee-owners managing 3,200+ annual projects across its four "Lifeline Sectors": Power, Renewables, Transportation, and Water.
"When a PE sponsor buys Ulteig, they are buying time to market. A firm that can design a transmission line and secure the land for it is infinitely more valuable than a firm that only does the design." — Gaya Capital Research
| Segment | ENR / Market Position | Structural Demand Driver |
|---|---|---|
| Power & Renewables | Top 20 Power Firms nationally · 70% of backlog | MISO $30B+ Tranche 1 transmission projects; grid modernization and IBR integration |
| Transportation / Aviation | Strong DOT penetration; FAA Part 139 specialist | IIJA $110B roads/bridges; FAA AIP grant cycles; recurring airport MSA recurrence |
| Water & Climate | Fargo-Moorhead $3.2B P3 project lead | IIJA $55B water; Clean Water Act NPDES compliance; first-in-class P3 delivery experience |
Westwood Professional Services has climbed ENR's Top 500 from #368 in 2018 to #77 in 2025 — a trajectory driven by disciplined M&A (9+ acquisitions), organic growth exceeding 30% year-over-year in 2024, and exceptional positioning across four structural growth verticals. National rankings of #3 Wind Design, #5 Solar Design, #6 Battery Storage, and #21 Power Design.
"Westwood has evolved from a regional surveying firm into a national infrastructure platform across four growth cycles of increasing complexity." — Gaya Capital Research
SCS Engineers is one of the most defensively positioned platform assets in U.S. environmental engineering — reporting $493M in 2023 revenue (12% YoY growth) driven by a 55-year history of non-discretionary solid waste compliance. The firm is #1 nationally in ENR Solid Waste and ranked #51 overall on ENR's Top 200 Environmental Firms.
"SCS is the only environmental firm in the United States with both the technical specialization in solid waste and the scale to deliver integrated lifecycle services across permitting, construction, and multi-decade OM&M." — Gaya Capital Research
| Risk Factor | Severity | Mitigation |
|---|---|---|
| ESOP Culture Transition | HIGH | Management equity rollover and broad employee incentive plan are essential mitigants. Preserve ESOP-like economic participation to retain culture. |
| S-Corp Tax Advantage Loss | MEDIUM | 3–5% effective margin reduction on C-Corp conversion. Sophisticated deal structure can partially preserve tax efficiency. |
| PFAS Regulatory Durability | MEDIUM | CERCLA designation faces industry legal challenges. State regulation floor likely to protect core demand. FOAM-X IP valuable regardless of regulatory pace. |
| IRA Rollback (RNG Credits) | MEDIUM | 45Z credits are the primary RNG economics driver. State mandates (CA SB 1383) provide independent demand floor. |
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