Itās been a busy couple of months for the architecture and design firm NELSON. It was wrapping up its merger with Wakefield Beasley & Associates and WB Interiors, a deal that was announced last November. It recapitalized its business with two financial partners, H.I.G. Capital and Prudential. And today, NELSON announced that it had entered into a merger agreement with FRCH Design Worldwide, an architecture and design firm with three offices and 200-plus employees, which specializes in retail, hospitality, and mixed-use.
NELSONās Chairman and CEO, John āOzzieā Nelson Jr., and FRCHās CEO, Jim Tippmann, will serve as Co-CEOs of the combined company, which now consists of 25 offices and more than 1,100 employees. FRCH Design Worldwide will be known as FRCH a NELSON company.
Tippmann tells BD+C that he and Nelson started talking ā15-16 months agoā about the possibility of merging their two businesses. Such a deal made sense, explains Tippmann, because āweāre both operating in a dynamic, changing business environment.ā
FRCH, with estimated revenue of $40 million, had concluded that it either had to acquire a company itself, or find a partner like NELSON that had the geographic reach FRCH needed in order to compete for business from larger clients, especially those propagating brands in multiple markets.
Just as the Wakefield Beasley deal got NELSON deeper into the mixed-use realm, merging with FRCH would bring into NELSONās stable āa sizable hospitality business,ā says Nelson. His company would also benefit from FRCHās ābig retail engineā in a sector where NELSON on its own has had difficulty gaining traction.
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Jim Tippmann (left) and John āOzzieā Nelson Jr., Co-CEOs of NELSON, will manage their company after the merger by region and practice sector. Image: NELSON
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As Co-CEOs, Nelson and Tippmann have crafted a regionally defined operating model. Tippmann says he will be āthe first point of contactā for NELSONās business in the Northeast and Southeast, and Nelson will take the lead for its offices in the Midwest and West. Practice responsibilities will align with each of the merging companyās specialties: for example, Tippmann will oversee retail and āconsumer interfaceā projects, whereas office, financial, and industrial projects will fall under Nelsonās domain.
The combined companyās holding company will continue to be based in Minnesota. But CincinnatiāFRCHās headquarters cityāis now NELSONās biggest office. Atlanta is the companyās biggest market, and will be managed by two offices there. Over the coming months, the leadership of both organizations will further integrate their expanded service offering.
Nelson tells BD+C that he still sees his company as a āglobal boutiqueā with an office structure that Tippmann thinks is now āa contemporary model, where leaders can be anywhere in the U.S.ā FRCH and NELSON both use video conferencing to connect their offices, which came in handy yesterday when the CEOs were announcing the merger to their employees via electronic town hall-like meetings. (Nelson notes that he spent 2Ā½ hours with 250 people in his companyās Atlanta offices answering their questions. āYou want to be as transparent as you can in those meetings,ā he says.)
āI couldnāt have been more pleased with how this came together,āĀ says Tippmann.
Nelson says his company has gotten to a size where āwe will have an opportunity to grow organically and attract talent.ā
However, having been involved in 40 mergers during his 30-year career with the company, Nelson says heās still on the lookout for acquisition candidates in Southern California and Texas, and for firms that would strengthen NELSONās competitive position in such sectors as industrial architecture and healthcare.
What he will avoid, though, is finalizing a merger just to get it done. āCulture trumps everything, and you donāt want to do a deal that leaves you with an operating nightmare.ā
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