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Acquisitions Build Bridge to FutureDESIGN FIRM RANKINGS SHOW REGION REBOUNDING
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MidwestNews, Data and Analysis for the Construction Industry in Illinois, Indiana, Michigan, Missouri, Ohio and Wisconsin
DESIGN FIRM OF THE YEAR - DLZ CORPORATION
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At DLZ, Everybody’s Considered FamilyBy thinking globally but acting locally, this minority-owned engineering firm stakes its place as a solid Midwest player BY MIKE ANDERSON
No doubt, growth through acquisition has proven a successful tactic for DLZ Corp., says chairman and chief executive officer Vikram “Raj” Rajadhyaksha. But the act of buying another firm alone won’t truly grow or even sustain a business; it’s about culture, he says.
It’s a message Raj’s sons Shyam and Ram Rajad-hyaksha have heard loud and clear. “When you buy a firm, what you’re really buying is those relationships long developed and nurtured by the people in that firm,” says Shyam, DLZ’s vice president and corporate secretary, “and if those key people leave, then those re-lationships go. You really want to make sure that you
create an environment where people want to stay.” With the majority of the firm’s dozen or so acquisi-
tions dating back to 1984, a common theme has been the desire of the outgoing owner to “willfully retire,” says Ram, also a DLZ vice president, who has guided and implemented recent key corporate additions in Michigan and Illinois.
“Our acquisition strategy has been successful be-cause we don’t come in and blow the organization up,” he says. “We really spend time to understand the employees and build that environment in which they think their best interests are to stay.”
NEW LIFE FOR LANDFILL Built in 2015, Ohio’s Lakewood Park Solstice Steps Project provides stunning sunset views of Lake Erie. DLZ provided construction administration, inspection and quality assurance testing.
TOP DESIGN FIRMS n ENR MIDWEST DESIGN FIRM OF THE YEAR
It seems to have worked. One of the acquisitions, Chas. W. Cole and Son, which dates back to 1916— and presents DLZ with the opportunity to celebrate 100 years of business—was bought in 1991. Joseph Zwi-erzynski was a structural engineer with the stalwart South Bend, Ind.-based firm back then; today, he is chief operating officer for DLZ, yet 25 years later he is still based in northwest Indiana at one of DLZ’s 20 offices. “We promote from within,” explains patriarch Raj. “I’m not very fond of hiring from the outside for senior executive positions.”
Among the largest minority-owned design firms in the U.S., Columbus, Ohio-based DLZ has become a perennial top 10 among ENR Midwest Top Design Firms, topped only by national and international firms doing business in the Midwest. In the new rankings based on 2015 design revenue, the firm is ranked the second largest in Indiana, eighth in Ohio and, at $91.2 million, ninth overall in the region. Of the company’s global design revenue, a whopping 88.3% came from the six states officially comprising ENR’s Midwest re-gion. DLZ, says Raj, remains a regional company; it may think globally, including related ventures in his native India, but acts locally first and foremost.
Recent notable and award-winning projects in-clude the Main Street Bridge in Columbus; the In-terstate 75 interchange in Gaylord, Mich.; the Mar-tin Luther King Jr. Bridge in Fort Wayne, Ind.; the $350-million OARS Deep Sewer Tunnel in Colum-bus; and, the firm’s largest project to break ground in 2015, the $184-million Akron CSO Ohio Canal Inter-ceptor Tunnel in northeast Ohio.
HOW DLZ CAME TO BEThe initials in the DLZ brand harken back to home-grown Columbus engineering firm Dodson-Lindblom Associates Inc., originally A.M. Kinney, and then Dod-son, Kinney and Lindblom.
An evening walk one night in 1978 led Raj into busi-ness for himself; he stopped to extend condolences to neighbor and Dodson-Lindblom junior partner Al Strange on the recent passing of Dodson. Raj, who had been in the Columbus market for 10 years and by then was the state of Ohio’s head of dam safety, learned the firm had shrunk to about a half-dozen employees and offered his assistance to Strange. “He said, ‘What can you do?’ I said, ‘Well, I can dig up work. I know every-body at the Army Corps of Engineers and I know ev-erybody at the state.’ ”
Furthermore, Raj pointed out to his Worthington neighbor, his ownership would qualify the firm as minority-owned and would enhance opportunities as a subsequent participant in the Small Business Ad-ministration’s Section 8(a) Business Development
Program. “That’s all they needed to hear. So, I got in as president. I owned 52% from Day 1 and I paid cash from my retirement fund from the state of Ohio. So, right then and there, I got into business and we haven’t looked back since then,” he says. “Our work with the Corps continued because they liked our work. Even with the 8(a) program, in all fairness, if you don’t do good work, you’ll get one job and they are not going to put up with nonsense. It was definitely a big help for a fledgling engineering company to get its feet beneath it, but then we did OK work.”
Dodson and Lindholm already had a good relation-ship with the Corps, and Raj’s background in dam safe-ty proved a perfect fit. “We also got very fortunate,” he admits. “During President Carter’s tenure, he started the National Dam Safety Program, and, all of a sud-den, he gave the responsibility for dams to the Corps of Engineers. The Corps locally found me to be a godsend because I had done all this work prior with the state. Instantly, we had more work than we knew what the hell we could do with. We did about 300 dam safety inspections in this region. It was just one contract after another, and it went on for three or four years.”
Equally important, says Raj, Strange remained with what is now DLZ for some time after the purchase, proving to be the first of many such amiable acquisi-tion relationships to be nurtured over the following two generations. One of the meeting rooms in the com-pany’s newly renovated head office in north Columbus today bears the Strange name.
As companies were added, they would be incorpo-rated as DLA, DLB, etc., with DLZ as the holding com-pany. DLZ is now the public brand.
MOVING RIGHT ALONG“In 1984, I started my acquisition program,” says Raj, noting that the firm was quickly growing too big for
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DIGGING DEEP DLZ was the lead engineering firm on the massive OARS tunnel project in Columbus, Ohio.
“By this time, I was getting a reputation of being able to acquire troubled engineering companies and turn them around without too much bloodshed.”
—Vikram “Raj” Rajadhyaksha,
Chairman & CEO, DLZ Corp.
the 8(a) program. “I knew this gravy train that I was on was not going to last. To compete with the rest of the world, we had to have skills and, wherever we didn’t have the skills, I decided I was going to add them by acquiring companies.”
The first addition was Mason-Deverteuil, a Colum-bus geotechnical firm housed on property adjacent to the current DLZ corporate office. That was followed in 1987 by the acquisition of what was then the largest engineering firm in Ohio, A.E. Stilson & Associates, founded by Gen. Alden E. Stilson. “I had known the general when I first came into town,” says Raj. “He was the president of the American Society of Civil Engi-neers locally, and he welcomed me into the society, for
which I was very grateful.” Stilson specialized in high-way work, which Dodson-Lindblom did not. “Again, I have followed my principle that if I am going to get into it, I am going to do it my way. I’m going to buy control,” says Raj.
A 50-employee company bought one with 200 em-ployees, “and other than the chairman, we didn’t fire anybody,” says Raj. “That has been our hallmark in all acquisitions. I don’t go in there and fire everybody.” More acquisitions followed in quick succession, in-cluding the monumental 1991 purchase of Cole. “By this time, I was getting a reputation of being able to acquire troubled engineering companies and turn them around without too much bloodshed, which is firing half the staff.”
The fit has to be right, though, says Zwierzynski. “We don’t buy every small firm,” he says. “There’s some chemistry that needs to happen, and we’ve walked away from some deals that just didn’t feel right.”
While keeping its offices local, DLZ has adopted a “one-company approach” to business that avoids silos. “We are a better business now,” says Ram. “We are out of the recession, the economy is growing, and we’re running a better practice now.” Adds Shyam: “All employees market for DLZ. We don’t use profit as a bad word—we realize we need profit in order to grow the company—but another key component is compassion, which I think is what attracts people to our company. A lot of owners don’t want to be ac-quired by a megafirm. They have a small-firm men-
CORPORATE PRINCIPLES DLZ emphasizes six principles on which the company was founded: growth, marketing, delivery, profit, compassion and safety.
FULL SERVICE DLZ was commissioned by the Military Dept. of Indiana to design additions and renovations to the South Bend Armed Forces Reserve Center, earning LEED Silver designation.
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tality and they want to keep that mentality, and that’s one thing we do.”
With his 70th birthday decorations still up on the wall behind him, Raj Rajadhyaksha isn’t about to rest on a long career that started when a university in the U.S. Midwest gave a chance to a curious kid from India. “We’re still growing, which is the truly impor-tant part,” he says. “Our backlog this year is higher than it has ever been, which is a definite indication that this year is doing better than last … and I’m still kicking.” n
DEEP HISTORY Indiana-based Chas. W. Cole and Son, which dates back to 1916, was incorporated into DLZ. Tunnel construction has come a long way over that time.
AHEAD OF CURVE Increasingly popular today, roundabout design has been part of the DLZ offering for the past 20 years. Projects in 2015 included the Sprinkle Road interchange with Interstate 94 in Kalamazoo, Mich.
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MIDWEST TOP DESIGN FIRMSRANK COMPANY
LOCATION/WEBSITETOP OFFICER
LIC. ARCH.ENGR.LEED AP
LARGEST PROJECT TO BREAK GROUND ITS LOCATIONPROJECT VALUE ($ MIL.)
MARKET SECTORS BY % OF REVENUE**
REGIONAL REV. 2015 ($ MIL)2015 2014
1 1 AECOM* Chicago | aecom.com Michael Just, Region Executive
95 622
71
I-55 & Lake Shore Drive Interchange Chicago 134.00
41 Transportation 20 Hazardous Waste 17 General Building
361.30
2 2 BURNS & MCDONNELL Downers Grove, Ill. | burnsmcd.com Scott Newland, Vice President, General Manager
4 115
10
Not Provided 43 Power 18 Hazardous Waste 11 Petroleum
235.98
3 3 ARCADIS NORTH AMERICA Highlands Ranch, Colo. | arcadis.com John Jastrem, CEO
— 196
—
Not Provided 62 Hazardous Waste 12 Sewerage/Solid Waste 12 Water Supply
150.01
4 4 HNTB CORP. Milwaukee | hntb.com Matthew T. Hintze, Senior Vice President
19 232
24
I-69 Section 5 Technical Procurement Adviser Indianapolis 325.00
88 Transportation 6 Sewerage/Solid Waste 4 Water Supply
139.06
5 5 WSP | PARSONS BRINCKERHOFF Chicago | wsp-pb.com/usa John Trotta, Central Regional Business Manager
3 246
18
EIS for I-94 Detroit 1,800.00
62 Transportation 24 Power 9 General Building
138.57
6 — HDR Chicago | hdrinc.com Joseph Cliggott, Managing Principal; Peter Guletsky, Area Manager
11 124
33
Not Provided 43 Transportation 20 General Building 18 Sewerage/Solid Waste
114.24
7 8 AMBITECH ENGINEERING CORP. Downers Grove, Ill. | ambitech.com Allan Koenig, CEO
— — —
Not Provided 70 Petroleum 30 Industrial Process
111.98
8 7 STANTEC Columbus, Ohio | stantec.com Elie Sabbagh, Vice President
27 147
22
Dearborn Combined Sewer Overflow Storage Pipeline Toledo, Ohio 14.00
27 General Building 19 Water Supply 15 Transportation
103.57
9 10 DLZ CORP. South Bend, Ind. | DLZ.com Joseph C. Zwierzynski, Chief Operating Officer
11 150
14
Akron OCI Ohio Canal Interceptor Tunnel Akron, Ohio 184.10
43 Transportation 26 Sewerage/Solid Waste 15 General Building
91.21
TOP DESIGN FIRMS n MAIN RANKING
*REVENUE WAS PROVIDED ON A FISCAL-YEAR BASIS. ALL OTHERS PROVIDED CALENDAR-YEAR DATA, WHICH IS PREFERRED.**MAY NOT ADD UP TO 100% DUE TO OMISSION OF OTHER MISCELLANEOUS MARKET CATEGORIES AND/OR ROUNDING.
Excerpted from Engineering News-Record, May 23, 2016, copyright by BNP Media II, LLC. with all rights reserved. This reprint implies no endorsement, either tacit or expressed, of any company, product, service or investment opportunity.
#C50572 Managed by The YGS Group, 800.290.5460. For more information visit www.theYGSgroup.com.
INDIANARANK FIRM $ MIL.
1 AMERICAN STRUCTUREPOINT INC. 54.24
2 DLZ CORP. 38.07
3 HNTB CORP. 22.43
4 LOCHMUELLER GROUP INC. 22.03
5 ARCADIS NORTH AMERICA 20.13
6 SUPERIOR ENGINEERING LLC 14.50
7 PATRIOT ENGINEERING AND ENVIRONMENTAL INC. 11.87
8 AECOM 11.70
9 BROWNING DAY MULLINS DIERDORF 10.54
10 HOK 8.62
11 WSP | PARSONS BRINCKERHOFF 7.69
12 WOOLPERT INC. 7.04
13 GHAFARI ASSOCIATES LLC 6.85
14 STANTEC 5.50
15 IMEG / KJWW / TTG 5.21
OHIORANK FIRM $ MIL.
1 AECOM 130.49
2 ARCADIS NORTH AMERICA 52.98
3 GPD GROUP 51.54
4 BURNS & MCDONNELL 49.59
5 MIDDOUGH INC. 37.76
6 WOOLPERT INC. 37.66
7 STANTEC 35.72
8 DLZ CORP. 32.09
9 HDR 30.88
10 WESTLAKE REED LESKOSKY 29.98
11 HKS INC. 24.37
12 TERRACON CONSULTANTS INC. 20.27
13 PROCESS PLUS 19.46
14 HATCH MOTT MACDONALD 17.84
15 COMMONWEALTH ASSOCIATES INC. 15.85
MICHIGANRANK FIRM $ MIL.
1 GHAFARI ASSOCIATES LLC 63.80
2 WSP | PARSONS BRINCKERHOFF 52.76
3 SMITHGROUPJJR 38.38
4 ARCADIS NORTH AMERICA 36.51
5 OHM ADVISORS 32.61
6 SME 30.95
7 HNTB CORP. 26.39
8 HARLEY ELLIS DEVEREAUX 19.50
9 STANTEC 18.96
10 AMBITECH ENGINEERING CORP. 15.77
11 AECOM 15.43
12 ALFRED BENESCH & CO. 13.35
13 TMP ARCHITECTURE INC. 11.89
14 TOWER PINKSTER TITUS ASSOCIATES 11.70
15 DLZ CORP. 10.80
