In 1983, Aram H. Keith founded his engineering and consulting firm, The Keith Companies (NASDAQ:TKCI). Last week, he announced he was selling his company to Stantec, a company that provides similar services primarily in Canada. On the news, Keith Companies' stock price surged 23.86% to $20.87.

Keith Companies provides sophisticated consulting on projects for real estate development (such as planned communities) and public works. Services include mapping, land planning, environmental impact assessments, water resource management, and so on.

Stantec, which had $398.4 million in revenues last year, paid a hefty price of nine times EBITDA for Keith Companies. So, what does it see in this company? First, Stantec gets geographic diversification -- as well as penetration in the fast-growing markets in the southwest of the U.S.

Next, the acquisition will allow Stantec to list its shares on an exchange in the U.S. This can help the company get better access to capital, as well as more effectively use its stock as currency for mergers and acquisitions.

Actually, Keith Companies is already in compliance with the rigorous requirements of Section 404 of Sarbanes-Oxley. This new law requires disclosure of the effectiveness of a company's internal controls. For small-cap companies, this is turning out to be something that is expensive and difficult to accomplish, as seen with many companies that have recently delayed their SEC filings.

Finally, Keith thinks that his company is still in a growth phase. However, he also thinks his company is at a stage where it needs to make "investments in more robust technological, financial, and information systems." Thus, with the acquisition, Keith will be able to use Stantec's enterprise resource planning (ERP) software system -- to examine resource allocation, cost-effective solution rollout, and expansion in the future.

Keith, who is 60, plans to stay on board through the integration of the acquisition; he will also be on the board of Stantec. But is the sellout a sign he will take a back seat? Probably not. On the conference call, he said: "I feel like I am 40 again."

Fool contributor Tom Taulli does not own shares mentioned in this company.