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
| Jul 22, 2013
Top Hotel Construction Firms [2013 Giants 300 Report]
Manhattan Construction, Structure Tone, Lend Lease top Building Design+Construction's 2013 ranking of the largest hotel contractors and construction management firms in the U.S.
| Jul 22, 2013
Top Hotel Architecture Firms [2013 Giants 300 Report]
Gensler, WATG, HKS top Building Design+Construction's 2013 ranking of the largest hotel architecture and architecture/engineering firms in the U.S.
| Jul 22, 2013
Hotel business continues to shine [2013 Giants 300 Report]
Despite some economic stressors, hotel operating fundamentals are poised to remain strong in 2013.
| Jul 22, 2013
Transportation Facility Report [2013 Giants 300 Report]
Building Design+Construction's rankings of design and construction firms with the most revenue from airport terminals and other transportation-related facilities, as reported in the 2013 Giants 300 Report.
| Jul 22, 2013
Convention Center Report [2013 Giants 300 Report]
Building Design+Construction's rankings of design and construction firms with the most revenue from convention center projects, as reported in the 2013 Giants 300 Report.
| Jul 22, 2013
Cultural Facility Report [2013 Giants 300 Report]
Building Design+Construction's rankings of design and construction firms with the most revenue from cultural facility projects, as reported in the 2013 Giants 300 Report.
| Jul 22, 2013
International Report [2013 Giants 300 Report]
Building Design+Construction's rankings of design and construction firms with the most revenue from international projects, as reported in the 2013 Giants 300 Report.
| Jul 19, 2013
Top BIM Construction Firms [2013 Giants 300 Report]
Turner, Clark Group, DPR top Building Design+Construction's 2013 ranking of the contractors and construction management firms with the most revenue from BIM-driven projects.
| Jul 19, 2013
Top BIM Engineering Firms [2013 Giants 300 Report]
Jacobs, URS, SAIC top Building Design+Construction's 2013 ranking of the engineering and engineering/architecture firms with the most revenue from BIM-driven projects.
| Jul 19, 2013
Top BIM Architecture Firms [2013 Giants 300 Report]
Gensler, HOK, HDR top Building Design+Construction's 2013 ranking of the architecture and architecture/engineering firms with the most revenue from BIM-driven projects.