Strategic Mergers Drive Stantec’s Plan
Thanks to a wave of California acquisitions plus internal growth, Stantec, headquartered in Edmonton, Alberta, has achieved a position as one of the state’s major design firms, working in a range of markets.
Editors of ENR regional publications have chosen Stantec as the Top Design Firm of California for 2010 based on the company’s performance and volume of work last year and its focus on such environmental innovations as net-zero design, sustainable transparency and Leadership in Energy and Environmental Design (LEED) Platinum achievements.
The editors’ choice also was influenced by the firm’s community outreach and work-force diversity programs.
Eric Nielsen, Stantec’s senior vice president, western U.S., Irvine, links the firm’s success to the company’s ability to adjust to global economic changes and to “working on the best projects with the best employees.”
Stantec has expanded greatly since Don Stanley founded the firm in 1954 as a one-person consulting engineering company. Worldwide, Stantec now employs more than 10,500 people in more than 160 offices, including 23 in California. It ranks No. 25 on Engineering News-Record’s latest Top 500 Design Firms list. Even with Stantec’s substantial expansion, Nielsen says, “Our message, vision and philosophy has not changed.”
The tough California construction market has had an impact on Stantec. The company’s revenue on ENR California’s list of leading design firms was down $15 million in 2010 from the previous year, and its rank dropped to No. 8, from No. 5. But Nielsen says 2010 “brought us a considerable increase in contract activity with clients on large-scale projects,” which included engineering and architectural work on the Sacramento Municipal Utility District’s new fleet-operations campus (in coordination with RNL Design), the largest U.S. net-zero project of its kind.
The project includes photovoltaic and thermal solar panels for onsite renewable energy, displacement and evaporative cooling, geothermal energy storage, radiant slab heating and cooling, and a heat-recovery pump system.
Nielsen adds, “Across the statewide landscape, it’s also encouraging to see ongoing transportation and transit work as well as some renewed activity in California’s real estate market.”
Other major California contracts last year include: the recently opened 472,000-sq-ft UC Davis Medical Center Emergency Services and Surgery Pavilion, one of the state’s largest level-one trauma centers; Laguna Honda Hospital in San Francisco, which opened last June; and a Federal Transit Administration project-management contract with operational direction coming from the firm’s Los Angeles office.
The list also includes a two-year, on-call civil engineering contract with Southern California Edison Co.; an Intelligent Transportation System strategy contract from the Metropolitan Transportation Commission for the Interstate 880 corridor in the San Francisco Bay Area; and a prime transportation engineering consulting contract from the Santa Clara Valley Transportation Authority.
Eighty Companies in 35 Years
Stantec has expanded over the years primarily through strategic acquisitions, purchasing more than 80 companies since 1976. Two key California additions last year were Anshen + Allen Architects, San Francisco, and ECO:LOGIC, Rocklin.
The 2010 acquisitions “have positioned us very competitively for several target sectors,” Nielsen says. He says Anshen + Allen brought expertise in health-care and higher education design, and operations in the United Kingdom to serve international clients. Nielsen says ECO:LOGIC’s expertise in working with public water agencies, meanwhile, helped strengthen the firm’s competitive position.
Other major California acquisitions since 2005 include: The Keith Cos., Irvine; ACEx, Oakland; Chong Partners Architecture, San Francisco; and RHL Design Group, Petaluma.
Stantec also has given back to the community. In 2009, the firm became a national sponsor of the Architectural, Construction and Engineering (ACE) Mentor program, with 22 offices and 41 mentor volunteers participating. Stantec donated $55,000 for Japan earthquake relief through employee contributions and company matching funds and raised more than $100,000 in a campaign to increase awareness about prostate cancer and to fund related research.
Stantec has focused on work-force and supplier diversity. This year it named George Powell from its San Francisco office as the director of diversity and inclusion and initiated a formal supplier-diversity program to provide opportunities for qualified minority- and women-owned firms and disadvantaged businesses.
Industry awards have come regularly for Stantec. Last year it received the Award of Excellence from the American Council of Engineering Companies’ California chapter and McGraw-Hill Construction’s Best of the Best Award, Green Building, for the net-zero National Renewable Energy Laboratory in Golden, Colo.
Though California and worldwide construction markets remain difficult, Nielsen says Stantec’s diversified roster of engineering disciplines keeps it successful. “Our pipeline always varies based on discipline,” he says. “Some [sectors] are noticeably better than in previous years and some of our disciplines are hiring, which is encouraging.” Nielsen adds that Stantec’s transportation, water, retail, environmental consultation and compliance, and power segments are “clearly taking an enhanced position as our stronger segments in California as we look ahead.”