2017 Top 500 Design Firms – Subsidiaries by Rank Rank Company Subsidiary Rank Company Subsidiary
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Overview p. 48 // Profitability p. 48 // Top 500 Volume p. 48 // Backlog p. 48 // Past Decade’s Design Revenue p. 48 Markets’ Share of Total Revenue p. 49 // Domestic and International Staff Hiring p. 49 // International Market Analysis p. 50 The Impact of Megamergers p. 51 // Top 20 Design Firms by Sector pp. 52-54 // Top 50 Designers in International Markets p. 57 // A New Home for DC Water p. 57 // Top 100 Pure Designers p. 58 // Hartford, Conn., Viaduct Alternatives Considered p. 59 // Top 500 Dialogue p. 60 // Hai Phong Hotel on the Rise p. 63 // How To Read the Tables p. 63 Top 500 Design Firms List pp. 64-73 // Where To Find the Top 500 pp. 74-75 INSIDE THE captionA goesNEW here SWOOSH for the firmZGF example Architects etcera LLP, firm with name. aptionSRG Partnershipgoes here for and the firmSkylab example Architecture, etcera is designing thefirm 3.2-million- name. sq-ft expansion of Nike’s world headquarters, near Beaverton, Ore. NUMBER 98 NUMBER PHOTO COURTESY OF ZGF ARCHITECTS LLP OF ZGF PHOTO COURTESY Market Poised for Takeoff Major design firms are ready for the Trump administration’s funding and tax proposals to take shape and translate into projects By Gary J. Tulacz enr.com May 1, 2017 Ⅲ ENR Ⅲ 47 THE TOP 500 DESIGN FIRMS 2016-2017 at a Glance NUMBER OF FIRMS VOLUME TOTAL NUMBER OF FIRMS DOMESTIC REPORTING PROFITABILITY REVENUE REPORTING PROFITS $ BILLIONS $92.8 HIGHER 427 SIZE OF BACKLOG 251 INTERNATIONAL DOMESTIC PROFITS REVENUE 111 $71.7 SAME INTERNATIONAL REVENUE 81 DOMESTIC INTERNATIONAL $21.1 LOSSES LOSSES LOWER 24 65 61 COMPARING THE PAST DECADE’S $80.6 $90.6 $80.0 $79.8 $85.1 $90.2 $92.69 $92.31 $91.81 $92.84 DESIGN REVENUE 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $ BILLIONS SOURCE: DODGE DATA & ANALYTICS/ENR Major design fi rms have set up the starting blocks and in 2016, from $69.07 billion in 2015. However, are ready to begin the sprint for a rapidly expanded revenue from projects outside the U.S. continued to marketplace. After the election of Donald Trump, fall, dropping 7.0%, to $21.14 billion, in 2016, after companies report positive signs in most markets. Early a 13.0% decline in 2015. economic news has been encouraging, as job creation The international downturn in revenue is largely in the private sector spiked in the fi rst quarter of 2017. due to a drop in design work in the oil-and-gas sector, But the failure of the president and Congress to agree “On which fell 22.0%, from $6.9 billion, in 2015, to on a health-care reform package and a tax-cut program infrastructure, $5.4 billion in 2016. This drop-off can be attributed has many fi rms worrying that it may be a while before everyone is to oil-price uncertainty. Oil prices began to rise only agreed and the starting gun goes off. everyone is late in 2016, giving some hope to fi rms in that market. Many large designers say the current market con- aligned, so we tinues to be healthy and believe it will stay that way have to capture Consolidation: More Deals Coming? in the near term. Some fi rms point to early indica- this moment.” Consolidation among design fi rms continued in 2016, tions that clients, particularly on the private-sector Vahid although at a somewhat less frenetic pace than in pre- side, think the new administration will cut taxes and Ownjazayeri, vious years. Among fi rms ranked on last year’s Top regulations, encouraging new capital investments. Executive Vice 500, DLR Group acquired New York City-based President and Further, Trump’s vow to aid in the rebuilding of U.S. architect Westlake Reed Leskosky (ranked at No. 320 Chief Growth infrastructure have those in the public sector anxious Offi cer, AECOM in 2016); NV5 Global Inc. acquired several fi rms, to get started. All this points to a continued strong including Las Vegas-based JBA Consulting Engineers construction market. However, many of the top U.S. (No. 357); Tulsa, Okla.-based engineer-contractor design fi rms are adopting a “wait-and-see” attitude. Matrix Services acquired Columbus-based River Con- A measure of the overall health of the market can sulting LLC (No. 377); Day & Zimmermann acquired be seen in the data from ENR’s Top 500 Design Firms Glenn Allen, Va.-based Hankins and Anderson Inc. list. Taken as a group, the Top 500 fi rms had a record (No. 412) and Woodard & Curran acquired Walnut design revenue of $92.84 billion in 2016, up 1.1%, Creek, Calif.-based RMC Water and Environment from $91.81 billion, in 2015. Market growth was up (No. 456). In addition, Jensen Hughes Inc. acquired on the domestic side, rising 3.8%, to $71.69 billion, previously ranked AON Fire Protection Engineering. 48 Ⅲ ENR Ⅲ May 1, 2017 enr.com OVERVIEW 23.7% GENERAL Markets’ Share of BUILDING 22.9% $22,020.6 TRANSPORTATION Total Revenue 15.6% $21,301.7 PETROLEUM $14,490.6 8.5% $ MILLIONS POWER 5.9% $7,865.5 3.9% WATER $5,501.7 INDUSTRIAL 1.7% $3,625.2 8.1% MANUFACTURING 5.2% HAZARDOUS $1606.5 WASTE SEWER $7,540.8 AND WASTE 3.1% $4,850.1 OTHER $2849.6 1.3% TELECOM $1,183.7 (MEASURED IN PROFESSIONAL 307 INCREASE PROFESSIONAL 53 DOMESTIC INTERNATIONAL FIRMS REPORTING) STAFF HIRING 56 DECREASE STAFF HIRING 21 STAYED THE SAME SOURCE: DODGE DATA & 100 62 ANALYTICS/ENR Further, Terracon acquired seven major design firms are seeing significant organic growth in all three sec- in 2016. Also, merger activity among large firms is 473 tors,” says Vahid Ownjazayeri, AECOM executive beginning to spike again this year (see p. 51). Top 500 firms vice president and chief growth officer. He is par- But Stantec Inc. rode the biggest wave on the that sent in ticularly bullish on infrastructure in the U.S. “The acquisition front in 2016. In addition to acquiring surveys last political, public, financial and capital markets are all Chicago-based VOA Associates Inc. (ranked at year. behind improving our infrastructure,” says Ownjaza- No. 181) and previously ranked Bury, Austin, and yeri, who notes that AECOM has the design, con- New York City-based Edwards & Zuck, Stantec struction and financial expertise to help build and find entered the construction arena by buying Broomfield, 68.7% financing for major projects around the country. Colo.-based engineer-contractor MWH Global. Saw revenue Stantec CEO Bob Gomes says the MWH acquisi- increases Equity Investor Interest tion was a response to marketplace opportunities for between 2014 Another trend is the continued push by equity investors more integrated services. “We are now reaching new and 2015. into the design field. Chicago-based investor Keystone markets in global geographies, continuing to prove Capital Inc. invested in Coral Gables, Fla.-based Target we are leaders in water and infrastructure markets Engineering Group in January 2016, and New York around the world,” he observes. 31.1% City-based equity investor KKR bought a stake in Gomes says Stantec now is working on strategies Saw revenue Houston environmental engineer Resource Environ- to support its global operations in the U.K., Australia, declines mental Solutions LLC last June. New Zealand, Latin America and central Europe. He between 2014 The biggest equity investor move occurred on admits that “our full integration strategy is time and 2015. March 31, when New York City-based New Mountain consuming and distracting in the short term, but it Capital acquired publicly traded TRC Cos., taking it builds long-term value as the team becomes truly private. “We had been getting calls almost every month integrated, which facilitates better collaboration.” about acquisitions, but New Mountain Capital was AECOM, which has made some of the largest especially aggressive in courting us,” says Chris Vincze, acquisitions in past years, currently is focusing on TRC’s CEO. organic growth. “Our markets in transportation, Vincze says New Mountain’s acquisition will leave water and buildings are looking very positive, and we the current management in place and provide a enr.com May 1, 2017 Ⅲ ENR Ⅲ 49 THE TOP 500 DESIGN FIRMS International Market Analysis $ MILLIONS 26.8% NUMBER OF FIRMS IN 25.8% EUROPE EACH REGION ARCTIC/ ASIA AND $5,659.1 24.8% AUSTRALIA AFRICA ANTARCTIC CANADA % $5,461.9 81 5 4.4 CANADA 144 LATIN AMERICA $5,240.6 $939.9 14.4% MIDDLE ASIA/ 0.0% 3.2% EAST AUSTRALIA $3,036 150 LATIN ARCTIC/ AFRICA AMERICA ANTARCTIC $679 125 $3.9 0.6% CARIBBEAN MIDDLE EAST ISLANDS CARIBBEAN $121.5 123 83 EUROPE 117 vehicle for further TRC investments in areas such as CEO of CHA Consulting Inc. project management. Until specifi c administration policies and laws are Vincze also notes that the following week, TRC in place, many fi rms are cautious about the election’s acquired Caltrop Corp., a Riverside, Calif., engineer- impact on the private sector. “I’ve seen nine presi- ing inspection and construction management fi rm. dential elections during the course of my career in “This acquisition was in the works before the New engineering. I can’t recall a single one that has gener- Mountain move,” Vincze says. He says Caltrop fi ts “People are not ated this much discussion around potential impact, into TRC’s plan to expand its array of environmental excited about positive and negative, to the business,” says Vincent sending their services to get into program and project management. dollars to P.