Seattle-based architecture firm Callison, one of the largest in the U.S., said it will be acquired by Dutch design giant Arcadis as it seeks to tackle an increasingly hungry global market.
Callison has 1,000 employees in 11 offices worldwide, including about 400 in Seattle.
The trade publication Building Design+Construction ranked Callison as the fifth-largest architecture firm in the U.S. based on 2013 revenues of $160 million.
Best known for its retail and mixed-use projects, Callison has a roster of corporate clients that includes Nordstrom, Microsoft, Amazon and Eddie Bauer.
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Its local projects include Seattle’s W Hotel, City Centre and Amazon’s South Lake Union campus; Microsoft’s corporate headquarters in Redmond; the Carillon Point mixed-use development in Kirkland; and Bellevue’s Bravern complex.
Internationally, the company has designed massive new developments from Shanghai to New Delhi and the Middle East.
It has three offices in China alone; the first opened nine years ago in Shanghai.
The move comes as Callison’s leadership foresees a rebound of the global market for high-end architectural and design services — an environment that requires either significant investment in new offices or being part of a larger group, said Callison CEO John Jastrem.
“If we were doing it alone we’d be looking at opening more offices in more foreign lands. That’s expensive and a bit risky,” he said in an interview.
Jastrem also said architecture firms are poised to enter an aggressive consolidation cycle, as many partners in firms that managed to navigate the downturn are near retirement and see a chance to cash out due to an improving business environment.
“We wanted to be in front of (that cycle) rather than in the end of it,” Jastrem said.
Jastrem said Callison will maintain its separate brand, and that he and other principals will stay with the firm. The company will remain headquartered in Seattle.
The acquisition by Arcadis, which employs 22,000 people and operates 300 offices globally, “will allow us to be fairly well compensated and also achieve very strong results,” he said.
The companies have been mulling the deal for a couple of years, Jastrem added.
The acquisition is also an opportunity to cash out for private-equity firm Blue Point Capital Partners, which had a majority stake in Callison.
The deal is all-cash, but the companies declined to disclose the terms.
Callison’s migration into Arcadis’ fold is expected to occur in the third quarter.
Jastrem said Arcadis has strong operations in the hot Middle East market, where Callison is relatively weak. The Dutch company also has a strong presence in China, which complements Callison’s forte.
As projects get bigger, it’s easier to score business as part of a larger operation that offers clients a full spectrum of services, Jastrem added. “It’s a really good fit,” he said.
In recent years, some segments that Callison specializes in serving, such as high-end retail, have seen momentous transformation driven by shoppers’ migration to the Internet.
Jastrem said Callison’s work for luxury retailers has grown very fast as these clients see the value in investing in stores that will serve as a shopping destination, even as such retailers incorporate the technology that’s challenging them.
In China, where the company was expanding at a breakneck pace a few years ago, business has slowed some, but it’s still growing at a 7 percent rate.
“I think to some extent that’s a better thing for us,” Jastrem said, adding that staffing during the explosive growth years was difficult.
Jastrem said business in North America was patchy — with some regions such as Texas, New York and Seattle doing very well, and others, such as Chicago, not so strong.