While many architecture, engineering, and environmental consulting firms' values are undoubtedly falling, most valuation multiples increased over the past year, according to ZweigWhite’s 2009 Valuation Survey of Architecture, Engineering, Planning & Environmental Consulting Firms. The survey—based on actual valuations for some 220 firms—reveals that the ratio of reported values of firms in relation to their profit, EBITDA (earnings before interest, taxes, depreciation, and amortization) and net service revenue all increased from the prior year. Value as a multiple of book value is the only ratio that declined.

Ian Rusk, an accredited business appraiser and contributing editor to the survey explains that while the survey’s findings may seem surprising, the numbers make perfect sense: “Due to the global recession, revenue and earnings are depressed in many firms, but the capacity to generate future earnings remains. While most firms’ values have fallen due to declining revenue and earnings levels, they have not fallen at the same rate. This is quite different from the trend in valuation multiples of publicly traded firms, which reached stratospheric levels in the fall of 2007, only to decline precipitously along with the rest of the market in 2008 and 2009. Many of the publicly traded firms that had price-to-earnings ratios in the 30x territory in 2007 have seen these ratios retreat back to the 10-15x range. Privately held firms, however, are not subject to the same sorts of market as those in the public realm,” says Rusk.