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Sunday, 02 February 2014 14:30

Visbeen, GMB part ways after merger

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Roughly a year and a half after GMB Architects + Engineers Inc. acquired Visbeen Architects Inc., the firms have ended their partnership.

The companies dissolved their relationship late last year with representatives from each firm calling the split a mutual decision.

“GMB and Visbeen are no longer affiliated,” said Tonya Folkert, executive assistant to GMB President Harm Perdok. “This decision follows discussions between both parties and reflects mutual respect and agreement.”  

In a statement provided to MiBiz, Perdock praised Visbeen Architects’ leadership in the residential building sector, but said GMB decided to focus on its core competencies in the K-12, higher education, health care, corporate and industrial sectors in line with the firm’s market expansion growth strategy.

GMB recently expanded its geographic reach by opening an office in Indianapolis, Ind. and is expanding efforts out of its Grand Rapids office, Folkert said.

A representative for Visbeen declined to share any further details on the terms of the split.

When the companies came together, the parties noted that GMB acquired Visbeen Architects, a smaller boutique residential and retail outfit, and that President Wayne Visbeen would take some ownership stake in GMB.

“It was a mutual, formal split,” said Andrea Mulder, sales and marketing manager for Visbeen Architects. “Sometimes, that’s the way it goes. Everything you do teaches you, and you can only grow and learn from it.”

At the time the acquisition was announced in July 2012, GMB had 80 employees and was looking to expand the firm’s reach and capabilities. Executives said the deal would allow both firms to enhance their presence and expand their client base to new markets.

GMB Vice President David Bolt called the deal a “major milestone” in the company’s growth strategy. Likewise, Visbeen at the time hailed the deal in which his company was becoming a part of the established GMB brand.

The GMB-Visbeen deal came together in the summer of 2012 during a busy time for M&A among architecture firms in West Michigan. By the end of the year, Grand Rapids-based Design Plus and Progressive AE had merged to form a $25 million, 150-person firm, and Concept Design and Serve Studios joined forces to create Concept Design LLC.

Since then, M&A activity cooled off because firms are busy just keeping up with the current pace of business activity, said Aileen Leipprandt, a commercial real estate and construction attorney with Hilger Hammond PC in Grand Rapids.

“From what I hear, folks are really busy,” Leipprandt said. “They’ve got less time on their hands to think about mergers. It seems there is more work to go around for everyone, although not to the levels we saw before the downturn.”

There isn’t a lot of growth in the design-build market, but there is stability, she said, noting it might be a solid 24 to 36 months before the industry could see pre-recession levels of growth.

“Who knows if we’ll ever come all the way back,” Leipprandt said.

The cooldown of M&A activity in the architecture sector locally comes as the national American Institute of Architects predicts an uptick in deal flow over the next year. More than half of firms responding to an AIA survey expected M&A activity to increase in 2014 as firms look to scale up their operations to handle an influx of work resulting from an improving economy. Nearly 40 percent of respondents said they expected M&A activity to stay near its current level, AIA Chief Economist Kermit Baker stated in the January Architecture Billings Index report.

But the number of bond issues for school districts across West Michigan, the momentum in multi-family housing and the need for new industrial space could bode well for the sector locally, Leipprandt said.

“Time is money right now and firms are hustling to keep clients happy,” she said. “But part of the issue we can’t lose sight of is the lenders and whether the money is loose or not. There are some banks (willing to lend) and some that won’t for projects. It’s really based on the credit philosophy.”

Read 6509 times Last modified on Sunday, 02 February 2014 14:54

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