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
| Dec 27, 2011
Clayco awarded expansion of Washington University Data Center in St. Louis
Once completed, the new building addition will double the size of the data center which houses sophisticated computer networks that store massive amounts of genomic data used to identify the genetic origins of cancer and other diseases.
| Dec 27, 2011
Ground broken for adaptive reuse project
Located on the Garden State Parkway, the master-planned project initially includes the conversion of a 114-year-old, 365,000-square-foot, six-story warehouse building into 361 loft-style apartments, and the creation of a three-level parking facility.
| Dec 27, 2011
Nova completes $60M Clearwater Conference Center
Comprising an entire city block, the 450,000 sq. ft. facility features over 400 meeting rooms, six theaters, a full-service health spa, complete with an indoor running track, and a commercial kitchen that can efficiently accommodate over 1,000 diners
| Dec 27, 2011
BD+C's Under 40 Leadership Summit update
The two-day Under 40 Leadership Summit continued with a Leadership Style interactive presentation; Great Solutions presentations from Under 40 attendees; the Owner’s Perspective panel discussion; and the Blue Ocean Strategy presentation.
| Dec 27, 2011
Suffolk Construction celebrates raising of Boston Tea Party Ships & Museum cupola
Topping off ceremony held on 238th Anniversary of Boston Tea Party.
| Dec 27, 2011
State of the data center 2011
Advances in technology, an increased reliance on the Internet and social media as well as an increased focus on energy management initiatives have had a significant impact on the data center world.
| Dec 27, 2011
USGBC’s Center for Green Schools releases Best of Green Schools 2011
Recipient schools and regions from across the nation - from K-12 to higher education - were recognized for a variety of sustainable, cost-cutting measures, including energy conservation, record numbers of LEED certified buildings and collaborative platforms and policies to green U.S. school infrastructure.
| Dec 21, 2011
DOE report details finance options for PV systems in schools
The report examines the two primary types of ownership models used to obtain PV installations for school administrators to use in selecting the best option for deploying solar technologies in their districts.
| Dec 21, 2011
AIA Chicago & AIA Chicago Foundation 2011 Dubin Family Young Architect Award announced
The Dubin Family Young Architect Award is bestowed annually and recognizes excellence in ability and exceptional contributions by a Chicago architect between the ages of 25 and 39.
| Dec 21, 2011
Few silver linings for construction in 2012
On the brighter side, nearly half of respondents (49.7%) said their firms were in at least “good” financial health, and four-fifths (80.2%) said their companies would at least hold steady in revenue in 2012.