Stantec, the global engineering and design firm, bolstered its position geographically and in several business sectors with its acquisition of Denver-based RNL Design, the architectural, interior, and urban design firm.
Terms of the agreement, which is expected to close next month, were not disclosed.
Josh Gould, RNLās chairman and CEO, tells BD+C that his company decided to put itself up for sale about 18 months ago, and entered into serious discussions with Stantec at the beginning of this year.
āWeāve been autonomous for more than 60 years, so our board didnāt make this decision lightly,ā he says. However, the board concluded that RNL couldnāt achieve the kind of market reach it wanted with its existing platform in a consolidating industry āthat is changing rapidly,ā says Gould.
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Josh Gould, RNL Design's chairman and CEO, will become a sector leader in Stantec's Buildings group. Image: Stantec
RNL joins Stantec with 134 employees and offices in Denver, Los Angeles, Phoenix, Washington, D.C., and Abu Dhabi, UAE. But, says Gould, RNL āreally didnāt have a lot of coverage in the United States outside of Denver. We have several national and international clients, and they needed broader coverage.ā
It gets that with Stantec, whose 22,000 employees are spread over 400-plus locations and six continents. Last year, Stantec, which is based in Edmonton, Alberta, reported $4.3 billion Canadian (US$3.2 billion) in revenue, and C$130.5 million in net income.
Stantecās business model over the past several decades has been to grow into sectors through acquisition (itās made over 125 deals). Stantec is active in five sectors: Buildings, from which it generates about 23% of its revenue; Water, which also accounts for 23%, and became a more important part of the company after its March 2016 acquisition of Denver-based MWH Global; Infrastructure (26% of revenue), Energy and Resources (12%), and Environmental Services (16%).
RNLās management team is staying on with Stantec, and Gould will become its Buildings Sector Leader. Eventually, he will take a leadership role in expanding Stantecās Civic business.
āRNL has an abundant portfolio in the Civic sector, especially in public transit,ā says Leonard Castro, Stantecās Executive Vice President-Global Buildings Practice. RNLās notable public transit projects include providing architectural, interior, and sustainable design for the 540,000-square-foot Los Angeles County Metropolitan Transportation Authority (Metro) Division 13 Bus Operations & Maintenance Facility, the first ground-up bus operations and maintenance facility for Metro in 30 years.Ā
Castro says Stantec also saw RNLās position in Denver and in the Middle East as plusses for the largerās companyās growth ambitions. āDenver is a strategic market for Stantec, and itās just a better [location] platform to service our clientsā than Edmonton is. He adds that Denver is āexceptionalā for its engineering schools.
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One of RNL's recent projects is the Research Support Faiclity at the National Renewable Energy Lab in Colorado. Ā Image: Courtesy of Stantec
RNLās strengths in sustainability, resilience, and urban design should solidify Stantecās position in each, especially given Stantecās recent āUrban Placesā initiative that targets projects related to city living, says Castro. Among RNLās recent projects is a 190,000-sf net-zero-energy operations building on 36 acres for the Denver Water Board, and the 340,000-sf Research Support Facility at the National Renewable Energy Lab (NREL) in Golden, Colo., for which RNL provided architecture and interior design, site planning, and landscape architecture.
Stantec, says Castro, also believes that having RNLās architectural design expertise could be a critical advantage in capturing projects for its Water division.
Stantec was MEP engineer on the NREL project, one of a half-dozen that Stantec and RNL had worked on together prior to this acquisition.
New leadership
Coincident to the Stantec-RNL transaction, Stantec announced that its president and CEO of eight years, Bob Gomes, would retire at the end of this year. Gomes, who started working for the company in 1988, oversaw Stantecās international expansion. Between the first quarter of 2009 and the first quarter of 2017, Stantec also completed nearly 50 acquisitions, and enjoyed a revenue bounce of 229%.
Replacing Gomes, effective January 1, 2018, will be Gord Johnson, a 20-plus-year Stantec vet and, since 2015, Executive Vice President of its Infrastructure business unit.
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Gord Johnson (left) will become Stantec's president and CEO on January 1, 2018, replacing Bob Gomes, who has held that position for more than eight years. Image: Stantec
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In an interview with the Edmonton Sun following his appointment, Johnson pointed to the companyās diversification strategy as one of the main reasons why it has been able to weather economic shifts in different markets. āWe have never been more diversified than we are now,ā notes Castro.
Johnson also said Stantec, under his leadership, would look to expand its platform in places where it already has solid footprints, such as the United Kingdom, Australia, and New Zealand.Ā
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