Orlando expert: Why Florida is among the hottest markets for acquisitions

Jay Chaudhari knows buyers are on the lookout for Florida businesses to buy — and Central Florida is a favorite.

The executive director of Winter Park-based mergers-and-acquisitions (M&A) advisory firm 1858 Capital Partners said his company has been involved in multiple transactions in the past couple of months.

1858 Capital Partners was the financial adviser on two acquisitions, one in August and one in September, with a third transaction announcement forthcoming, Chaudhari told Orlando Inno. Terms of the deals and specifics about the companies' revenue and employee counts were not disclosed.

However, West Palm Beach-based Grovecourt Capital Partners' purchase of Orlando-based engineering firm Traffic & Mobility Consultants — an engineering company specializing in transportation planning and traffic engineering — is emblematic of a trend, Chaudhari said. Florida companies are hot commodities, whether the buyers are in-state or from elsewhere.

The Orlando company will offer "tremendous" opportunities for geographic expansion, Grovecourt Managing Partner Alex Vargas said in a prepared statement. Traffic & Mobility Consultants' headquarters will remain in Orlando.

Why mid-market mergers and acquisitions in Orlando matter

A rise in mid-market deals is a healthy sign that companies are pursuing strategic growth agendas, PricewaterhouseCoopers' 2023 Global M&A Industry Trends Mid-Year Update showed. More deals like this can lead to drive transformation and growth in companies, according to the report.

In addition, 1858 Capital Partners was involved in an M&A deal of its own in March, buying Orlando-based Capital Strategies Group for an undisclosed price, as Orlando Business Journal previously reported.

Orlando Inno sat down with Chaudhari to find out more about the current M&A landscape in the region. Here are some highlights from that conversation:

Why do business buyers like Florida?

First of all, it’s a business-friendly state. Tax-wise it’s great, and just look at the data on population growth. There’s always going to be consumer demand. Even with a B2B (business-to-business) company, the constant population growth means more business. Physical proximity to other Florida businesses makes a potential acquisition more appealing because they're more likely to sell their services to those other businesses near them. Potential buyers observe how regions handle economic cycles like downturns. The way Florida handled Covid-19, the sustainable market we have, that was noticed.

Does the Orlando area have an edge?

Being in the middle of the state, the growth opportunities to expand outward and extend to the whole state are better than, say, Miami. It’s going to take a while to get to the northwest corner of the state. When a company is growing organically, being in the center of it all helps.

The Central Florida market is oriented to real estate. How does that relate to this acquisition?

When you look at what Traffic & Mobility Consultants does — studies, analyses, planning and design related to traffic and transportation — real estate and infrastructure development are at the heart of it. Let’s say a private developer wants to build a 1,000-home subdivision, which is a typical situation in Central Florida. They need traffic studies to understand how the number of people moving into this subdivision will impact roadways and traffic in general. In this part of the state, where we have a lot of development, TMC’s services are essential.

1858 Capital Partners

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