GRAND RAPIDS — A busy summer of merger-and-acquisition activity among local architectural firms continues to reshape West Michigan's competitive landscape for building design.
On Monday, two Grand Rapids-based firms, Progressive AE and Design Plus, announced they would merge to create a 150-person firm specializing in architecture, engineering and interior design. Terms were not disclosed.
The merger marks the third transaction involving West Michigan architecture and design firms since July. Grand Rapids-based Concept Design and Serve Studios merged to form Concept Design LLC earlier this month, and Holland-based GMB Architecture and Engineering Inc. acquired Visbeen Associates Inc. in July.
The merger of Progressive AE and Design Plus will help expand the work portfolio of the new firm, said Progressive CEO Brad Thomas, who will lead the combined company. The firm will operate under the Progressive AE name and expects to have annual revenues of $25 million. While that’s less than the $27 million in billings Progressive reportedly had on its own in 2008, both firms are fighting back from a down market that has seen new construction slow over the last five years. The two firms had worked together on projects and began merger discussions over the past year.
“We first began talking to Design Plus just over a year and half ago, when we jointly proposed on a project for a higher education school,” Thomas said. “We had been doing our research on student housing, which Design Plus is the expert in, and rather than try and compete, we decided to reach out and partner with them.”
From there, the companies started getting to know the depth of each firm’s portfolio and what the benefits of a merger would be, he said.
With Progressive AE’s national presence, Thomas said he is looking forward to leveraging Design Plus’ expertise in other markets outside the region and the state.
“We are already both competitive, but as a collective, we encompass more markets and will go further together,” said Craig Nicely, principal at Design Plus. “There is a lot of synergy to this deal. Together, we saw an opportunity to become one of the premier design firms.”
Design Plus’ 3-D building modeling technology, which Nicely described as the future of the industry, along with Progressive AE’s engineering experience gives both companies new tools, he said.
The firms will also blend staff from both companies into Progressive’s current 50,000-square-foot office located at 1811 4 Mile Road, putting the new company at 150 full-time employees.
Thomas said senior leadership from Design Plus would find places on Progressive’s board.
Beene Garter LLP and Smith Haughey Rice & Roegge PC advised Design Plus in the merger, while Progressive consulted with Crowe Horwath LLP and Varnum LLP.