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
| Sep 27, 2013
ASHRAE/IES publish first standard focused on commissioning process
ANSI/ASHRAE/IES Standard 202, Commissioning Process for Buildings and Systems, identifies the minimum acceptable commissioning process for buildings and systems as described in ASHRAE’s Guideline 0-2005, The Commissioning Process. Standard 202 is ASHRAE’s first standard focused on the commissioning process.
| Sep 26, 2013
6 ways to maximize home-field advantage in sports venue design
Home-field advantage can play a significant role in game outcomes. Here are ways AEC firms can help create the conditions that draw big crowds, energize the home team to perform better, and disrupt visiting players.
| Sep 26, 2013
Literature review affirms benefits of daylighting, architectural glazing
The use of glass as a building material positively impacts learning, healing, productivity and well-being, according to a white paper published by Guardian Industries and the University of Michigan Taubman College of Architecture and Urban Planning. The findings highlight the significant influence daylighting and outside views have on employees, workers, students, consumers and patients.
| Sep 26, 2013
Mobilizing your job site to achieve a paperless project: fact or fiction?
True mobility in the field has rapidly evolved from lock-box kiosks on each floor to laptops on rolling carts to tablets and iPads loaded with drawings sets stored in the cloud. And WiFi-ready job sites have gone from “nice to have” to “must have” status in just a little over a year.
| Sep 26, 2013
Leading in the face of change
As AEC firms navigate toward an uncertain future, the most effective leaders are those who eagerly adapt to change. Here are three attitudes that drive leaders who are of most value to their firms.
| Sep 23, 2013
The art of rewarding employees
What’s the best way to reward those employees who go the extra mile, particularly when it’s not always feasible to give large financial bonuses? According to author and “recognition expert” Dr. Bob Nelson, the most effective employee rewards are also the least expensive.
| Sep 23, 2013
Six-acre Essex Crossing development set to transform vacant New York property
A six-acre parcel on the Lower East Side of New York City, vacant since tenements were torn down in 1967, will be the site of the new Essex Crossing mixed-use development. The product of a compromise between Mayor Michael Bloomberg and various interested community groups, the complex will include ~1,000 apartments.
| Sep 20, 2013
August housing starts reveal multifamily still healthy but single-family stagnating
Peter Muoio, Ph.D., senior principal and economist with Auction.com Research, says the Census Bureau's August Housing Starts data released yesterday hints at improvements in the single-family sector with multifamily slowing down.
| Sep 19, 2013
What we can learn from the world’s greenest buildings
Renowned green building author, Jerry Yudelson, offers five valuable lessons for designers, contractors, and building owners, based on a study of 55 high-performance projects from around the world.
| Sep 19, 2013
6 emerging energy-management glazing technologies
Phase-change materials, electrochromic glass, and building-integrated PVs are among the breakthrough glazing technologies that are taking energy performance to a new level.