Stantec, one of the industry’s largest architecture/engineering firms, has signed a letter of intent to acquire Chicago-based VOA Associates, a top-10 architectural firm with eight offices and 280 employees in the U.S., Brazil, and China.
Based in Edmonton, Alberta, Stantec operates from over 250 offices worldwide. Its 15,000 employees include 3,800 who work in its building design practice, which the acquisition of VOA is expected to bolster.
“VOA strengthens our collective ability to grow our building practice in U.S. markets,” said Bob Gomes, PE, Stantec’s President and CEO. “Their talented staff has produced an impressive portfolio of workplace, healing, leisure, learning, civic, and entertainment venues.”
Stantec is acquiring VOA’s stock, but it did not disclose the terms of the agreement. If the parties complete this deal in late March, as planned, it would be Stantec’s 13th acquisition since January 2014. Recent transactions include its July 2015 purchase of certain assets and liabilities of VI Engineering, a 30-person firm, and the August 2015 acquisition of Irvine, Calif.-based, 60-person VA Consulting, a community development, transportation, and water-engineering firm.
In its financial report for the quarter ended September 30, 2015, Stantec reiterated its goal to be a top-10 global design firm, and to grow its business at a compound average rate of 15% per year. Through the first nine months of 2015, Stantec’s gross revenue increased by 15.1% to 2.167 billion Canadian dollars (US$1.55 billion), and its net income rose by 3.7% to C$131.1 million.
“Joining Stantec expands horizons and opportunities for our staff and clients,” says Michael Toolis, AIA, LEED AP, VOA’s Chairman and CEO. “Both firms share a commitment to design, a global growth strategy, and market diversity.”
Stanis Smith, SVP with Stantec, tells BD+C that VOA’s leadership “will absolutely” stay on post merger. Stantec’s operations are divided into four groups, and VOA will be folded into its Buildings Group, whose management structure will be altered to accommodate this integration.
Smith says the two firms had been discussing this merger for several months. “What we saw is a complimentary fit, with no redundancies. It’s a marriage that make sense in both directions.” Smith adds that during those talks, Stantec and VOA officials identified a number of project opportunities that they could pursue jointly.
Smith says Stantec looks at acquisitions “as a way of getting better, not just bigger. Growth is not the design, but the outcome. You wouldn’t believe the number of inquiries we get, but we’re very selective in our acquisitions, where we’re looking for complimentary skills, geographies, or both.”
Toolis tells BD+C that VOA had considered private equity and international AEC firms as possible suitors. By choosing to join forces with Stantec, VOA “is ready to take another step” by “gaining access to [Stantec’s] size, portfolio, and talent.”
Toolis notes, too, that by acquiring VOA, Stantec will be doubling the size of its New York office, and significantly increasing its presence in Chicago, where VOA employs 140 people and Stantec 50. VOA is active in Orlando, where Stantec didn’t have an office, and is big in the entertainment and defense sectors, which hadn’t been as prominent for Stantec.
“We filled some gaps, and they strengthened our bench,” says Toolis.
The Stantec-VOA agreement comes at a time when consolidation (or rumblings about potential deals) within the AEC industry appears to be gaining momentum. Earlier this month, for example, London-based GB Fitzsimon, a cost and project consultant, announced it would merge with Cumming, a Los Angeles-based international project management and construction services firm.
A survey conducted last year by Zweig Group found that 42% of the architecture and planning firms polled were considering acquisitions, compared to 30% in 2012; and that 68% of the firms polled include a merger or acquisition in their strategic plans for the next five years.
VOA has been in business 46 years and is currently a decent-sized company—it generated more than $70 million in architecture revenue in 2014. But Toolis says his firm acknowledged that size matters at this moment in its history.
“Before the Internet, we depended primarily on our relationships," says Toolis. "But now that we’re at a certain level, we’re spending more on our website and social media, which gets expensive. And gets harder and harder to compete.”
Toolis says that on practically every job it bids, VOA goes against the largest firms in the world. Becoming part of Stantec “gives us a lot more firepower.” And while the VOA brand will disappear, Toolis says his company’s relationships with clients “don’t necessarily depend on our name.”
Related Stories
| Aug 5, 2014
Shigeru Ban-designed Aspen Art Museum will open doors to public this week
After 18 month of planning and construction, the museum will open its new Shigeru Ban-designed facility to the public on August 9.
| Aug 5, 2014
Will driverless cars kill the parking structure?
A report from Deloitte highlighted how driverless cars could dramatically alter car ownership in the future, pushing the pendulum from ownership to rentals and ride sharing.
| Aug 5, 2014
K-12 School Sector Giants: Pent-up demand finally produces movement in schools market [2014 Giants 300 Report]
After a long period of anemic performance, with growth mostly driven by renovations and additions, the K-12 sector is showing renewed interest in new construction, according to BD+C's 2014 Giants 300 Report.
| Aug 4, 2014
Jean Nouvel commissioned to design Islam Museum next to WTC
El-Gamal's plans has been dubbed controversial by many industry professionals.
| Aug 4, 2014
Facebook’s prefab data center concept aims to slash construction time in half
Less than a year after opening its ultra-green, hydropowered data center facility in Luleå, Sweden, Facebook is back at it in Mother Svea with yet another novel approach to data center design.
| Aug 4, 2014
Retail Giants: Grocery-anchored centers, trophy malls among hot retail developments [2014 Giants 300 Report]
Despite the rapid growth of online shopping, the 'bricks and mortar' retail sector is faring quite well, headed by power centers, grocery-anchored centers, and trophy malls, according BD+C's 2014 Giants 300 Report.
| Aug 4, 2014
BIM Giants: Firms enhance BIM/VDC with advanced collaboration tools [2014 Giants 300 Report]
Cloud-based data sharing, rapid iterative design, and cross-discipline collaboration are among the emerging trends in the BIM/VDC field, according to BD+C's 2014 Giants 300 Report.
| Aug 4, 2014
7 habits of highly effective digital enterprises
Transforming your firm into a “digital business” is particularly challenging because digital touches every function while also demanding the rapid development of new skills and investments. SPONSORED CONTENT
| Aug 4, 2014
What AEC executives can do to position their firms for success
Most AEC leadership teams are fastidious about tracking their hit rate–the number of proposals submitted minus the number of proposals won. Here are three alternatives for increasing that percentage. SPONSORED CONTENT
| Aug 1, 2014
Best in healthcare design: AIA selects eight projects for National Healthcare Design Awards
Projects showcase the best of healthcare building design and health design-oriented research.