Midsize design firms with revenue between $100 million and $250 million are often thought of as being the industry's most endangered species as well as its prime buyout targets. But Walnut Creek, Calif.-based water-wastewater firm Carollo Engineers Inc. thinks it will do just fine.

Water Firm OK With Midsize
Photo: Courtesy Carollo

“We've stayed true to the goal of internal ownership, and we're not tempted by big-dollar numbers,” says Gary Deis, CEO since 2002. Carollo has $168.5 million in 2010 revenue and 650 employees. After market conditions forced the firm to re-examine its valuation, “our internal stress about money went away,” Deis says. Carollo will broaden its ownership—now at only 8% of staff—however, its board will remain in-house, Deis adds. Carollo's growth is flat but profitable, and backlog is up 20%.

“Water-related work is all we do, and we've worked hard to make technical innovation what distinguishes us,” says Executive Vice President B. Narayanan, noting unique approaches at a Denver project (above). “We value this culture. It's a big part of what motivates us to stay independent and employee-owned.”