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
| Nov 11, 2010
USGBC certifies more than 1 billion square feet of commercial space
This month, the total footprint of commercial projects certified under the U.S. Green Building Council’s LEED Green Building Rating System surpassed one billion square feet. Another six billion square feet of projects are registered and currently working toward LEED certification around the world. Since 2000, more than 36,000 commercial projects and 38,000 single-family homes have participated in LEED.
| Nov 10, 2010
$700 million plan to restore the National Mall
The National Mall—known as America’s front yard—is being targeted for a massive rehab and restoration that could cost as much as $700 million (it’s estimated that the Mall has $400 million in deferred maintenance alone). A few of the proposed projects: refurbishing the Grant Memorial, replacing the Capitol Reflecting Pool with a smaller pool or fountain, reconstructing the Constitution Gardens lake and constructing a multipurpose visitor center, and replacing the Sylvan Theater near the Washington Monument with a new multipurpose facility.
| Nov 9, 2010
Just how green is that college campus?
The College Sustainability Report Card 2011 evaluated colleges and universities in the U.S. and Canada with the 300 largest endowments—plus 22 others that asked to be included in the GreenReportCard.org study—on nine categories, including climate change, energy use, green building, and investment priorities. More than half (56%) earned a B or better, but 6% got a D. Can you guess which is the greenest of these: UC San Diego, Dickinson College, University of Calgary, and Dartmouth? Hint: The Red Devil has turned green.
| Nov 9, 2010
12 incredible objects being made with 3D printers today
BD+C has reported on how 3D printers are attracting the attention of AEC firms. Now you can see how other creative types are utilizing this fascinating printing technology. Among the printed items: King Tut’s remains, designer shoes, and the world’s smallest Rubik’s Cube.
| Nov 9, 2010
U.S. Army steps up requirements for greening building
Cool roofs, solar water heating, and advanced metering are among energy-efficiency elements that will have to be used in new permanent Army buildings in the U.S. and abroad starting in FY 2013. Designs for new construction and major renovations will incorporate sustainable design and development principles contained in ASHRAE 189.1.
| Nov 9, 2010
Designing a library? Don’t focus on books
How do you design a library when print books are no longer its core business? Turn them into massive study halls. That’s what designers did at the University of Amsterdam, where they transformed the existing 27,000-sf library into a study center—without any visible books. About 2,000 students visit the facility daily and encounter workspaces instead of stacks.
| Nov 9, 2010
Turner Construction report: Green buildings still on the agenda
Green buildings continue to be on the agenda for real estate owners, developers, and corporate owner-occupants, according to the Turner 2010 Green Building Market Barometer. Key findings: Almost 90% of respondents said it was extremely or very likely they would incorporate energy-efficiency improvements in their new construction or renovation project, and 60% expected to incorporate improvements to water efficiency, indoor environmental quality, and green materials.
| Nov 5, 2010
New Millennium’s Gary Heasley on BIM, LEED, and the nonresidential market
Gary Heasley, president of New Millennium Building Systems, Fort Wayne, Ind., and EVP of its parent company, Steel Dynamics, Inc., tells BD+C’s Robert Cassidy about the Steel Joist Manufacturer’s westward expansion, its push to create BIM tools for its products, LEED, and the outlook for the nonresidential construction market.
| Nov 3, 2010
First of three green labs opens at Iowa State University
Designed by ZGF Architects, in association with OPN Architects, the Biorenewable Research Laboratory on the Ames campus of Iowa State University is the first of three projects completed as part of the school’s Biorenewables Complex. The 71,800-sf LEED Gold project is one of three wings that will make up the 210,000-sf complex.
| Nov 3, 2010
Park’s green education center a lesson in sustainability
The new Cantigny Outdoor Education Center, located within the 500-acre Cantigny Park in Wheaton, Ill., earned LEED Silver. Designed by DLA Architects, the 3,100-sf multipurpose center will serve patrons of the park’s golf courses, museums, and display garden, one of the largest such gardens in the Midwest.