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Arranged Marriages

Two recent deals point to a growing number of mergers and acquisitions among design firms.

By Sara Hart
March 4, 2014
Photo © Mark Herboth
The Anacostia Library in Washington, D.C. by The Freelon Group and R. McGhee & Associates.

At the start of this month, two significant deals combining design firms were announced within days of each other. On March 4, Perkins+Will (P+W) and The Freelon Group—the Research Triangle Park (RTP), North Carolina, firm headed by Phil Freelon—said they would merge. The day before, Shanghai Xian Dai Architectural Design Group unveiled its acquisition of Wilson Associates, a 400-person interior design firm with headquarters in Dallas and offices around the world.

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As the economy slowly emerges from the recent recession, there has been a noticeable uptick in mergers and acquisitions among firms in the A/E/C industry, according to DesignIntelligence, a bimonthly report from the Design Futures Council. “We are currently in a zone that is more active than the pre-recession period and with a big difference: the deals are often smarter,” explains James Cramer, chairman of the Design Futures Council and chairman and principal of the Greenway Group. “We know of approximately 35 potential business combinations that are currently at one stage or another of development. No doubt, there are others outside our peripheral vision.”

Although different in many ways, the two deals demonstrate the current drive by many large firms to expand (or deepen) their geographic reach and broaden their scope of services. P+W, a multidisciplinary firm with 1,500 employees in 24 locations worldwide, already has offices in RTP and Charlotte, North Carolina. But it is betting that Freelon’s portfolio of high-profile cultural projects—such as the Smithsonian Institution’s National Museum of African American History and Culture in Washington, D.C.—will strengthen its operations in the Mid-Atlantic region and its design reputation.

Freelon employs just 42 people, so the size discrepancy with P+W suggests an outright acquisition by the larger firm. But P+W’s president and CEO Phil Harrison characterized the deal as a two-way merger. The two firms have collaborated over the years, so personal relationships evolved and the idea of merging evolved organically, says Harrison. “I’ve known Phil Freelon for many years. His firm is one of the most successful and well-rounded architecture practices in the Mid-Atlantic, and Phil is a highly talented architect, as well as dedicated teacher and mentor,” he says.

The combined firm will practice under the P+W name and Freelon will serve as the managing and design director of the North Carolina practice. He will also be “an important member of the firm-wide leadership team” and will join its board of directors. So he will have an opportunity to lead P+W projects abroad and enhance his global recognition. “There’s a synergy between our firms, an alignment of goals and a commonality of purpose. There’s a lot of activity in the Mid-Atlantic, and together we can work at an even higher level,” says Freelon.

Freelon founded his practice in 1990 and has designed important cultural projects such as the National Center for Civil and Human Rights in Atlanta, the Emancipation Park in Houston, and public libraries in Washington, D.C. The National Museum of African American History and Culture, designed as part of a team with David Adjaye, Davis Brody Bond, and SmithGroup, is under construction on the National Mall in Washington.

Meanwhile, the acquisition of Wilson Associates by Shanghai Xian Dai Architectural Design Group, the parent company of East China Architectural Design & Research Institute (ECADI), points to the growing involvement of Chinese design firms around the world. ECADI is one of the leading design institutes in China and has collaborated on major projects such as the Shanghai World Financial Center with KPF and the Wuhan Greenland Center with Adrian Smith + Gordon Gill Architecture. Wilson Associates, which was founded in 1971, has a large portfolio of luxury hospitality and interior architecture projects and operates offices in Dallas, Los Angeles, New York, Abu Dhabi, Dubai, Shanghai, Singapore, and Kochi, India. “As one of the world’s most renowned architecture firms, we wanted to align our company with a strategic partner that will strengthen our international footprint,” says Yun Qin, chairman of Xian Dai. “In Wilson Associates, we have found a like-minded company that shares our passion for excellent design and desire to secure high-end market share.”

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