Two leaders in the local design-build sector joined forces last year when Nashotah-based construction company MSI General Corp. acquired Milwaukee-based architectural firm Tredo Group LLC. The deal marked seven years since Jeff Tredo launched his firm as a spinoff of Korb Tredo Architects Inc. (now known as Korb + Associates Architects), which he co-founded in
Two leaders in the local design-build sector joined forces last year when Nashotah-based construction company MSI General Corp. acquired Milwaukee-based architectural firm Tredo Group LLC. The deal marked seven years since Jeff Tredo launched his firm as a spinoff of Korb Tredo Architects Inc. (now known as Korb + Associates Architects), which he co-founded in 2006. MSI General was founded in 1957, and the privately held, veteran-owned firm is led by Ken Krahe, who took the helm as president in 2019 shortly before longtime chief executive officer Dirk Debbink stepped down to assume a new role as chairman. BizTimes Milwaukee associate editor Maredithe Meyer sat down with Krahe and Tredo, who now serves as vice president – director of design at MSI General, to discuss the acquisition and its impact on future growth. The following conversation has been edited for length and clarity.BizTimes: What’s the story behind MSI General’s acquisition of Tredo Group? Ken Krahe, president: “We’ve known each other for quite a while, but what really kicked off the discussions about the partnership was that we’d been in a (Metropolitan Milwaukee Association of Commerce) executive roundtable group together, and Jeff was considering a couple of options with Tredo Group. When I heard that, it piqued my interest because a lot of the types of projects and types of clients that he worked for were very similar to our client base, so the fact that he was considering options, I threw one more at him to consider.
“Even though it’s contractually an acquisition, we’ve looked at it from day one as a partnership, a merging and a blending of two strong companies: Tredo Group as a design engineering firm and MSI general as a fully integrated design-build general contractor. The skill sets, clients and approach we have to projects was very similar, so it’s really a natural partnership.”
Jeff Tredo, vice president – director of design: “Being part of the MMAC roundtable group, Ken watched me go through and entertain a couple of different merger discussions, formally and informally, and really what I appreciated was he didn’t interfere with those. He let them play out, and I think that’s where we both realized there might be a really strong opportunity here that I wasn’t necessarily expecting, but when it was posed to me as an opportunity (in fall of 2021), I really took a step back and looked at everything personally and professionally, my family and where I’m working, the kinds of projects, the kinds of work they’re doing and it just seemed like an amazing fit. It came together fairly quickly.”BizTimes: Jeff, what was most attractive about MSI General as a buyer? Tredo: “(Tredo Group was) in growth mode but also sort of in startup mode without a lot of resources. So right about then, I knew that my firm and the work I was doing was much larger than me or a handful of other people. So, the question was how to combine that with another firm that was going to be the right fit. I was definitely interested in becoming a part of something more established. As fun as it is to wear all the hats and be in startup mode, it’s not as glamorous as everybody might think all the time. I needed a little more balance with not only my family, but also some of my clients, I think they were hoping that I would become part of something a little bit more stable, considering how up and down a startup can be.”
“(The COVID-19 pandemic) was a big disruptor for a lot of industries, companies, people and families, and coming out of that I was trying to make sure I was on a good, strong track. That was a factor, definitely. MSI General is so well established and well run and organized, and there’s a reason for that in terms of the history and legacy and who’s been at the helm for so many years. That was really attractive to me, too, to have so many of those systems and processes in place, and the core values meshed perfectly with what I was all about with my projects and clients. As a startup, you have an eye on what you want to become and that level of stability and organization, and here was an opportunity to have it immediately.”
BizTimes: Ken, what kinds of operational changes has the acquisition brought to MSI?Krahe: “It’s been very seamless. As Jeff mentioned, our core values were aligned, and that’s a big part of making this work. I think Jeff has done a great job of coming in here and enhancing an already strong design team that we have and meshing well with our current leadership team that we have in place. It’s a little different than what he was used to in regard to always having the same construction team, but it’s been a benefit to have that consistency as we’re developing the current list of projects that we’re working towards.”
Tredo: “Seamless is a great way to describe it. … Having that construction piece in house – in terms of construction management and estimated project management – is just a game changer for my team and my clients. … The industry has changed a lot in the past 25 years, in terms of general contracting and construction management, with terms like integrative project delivery. And really they’re all just putting that team together. You can’t have a great project without a great client, but also you have to have a great construction team and a great design team, and getting all three together has been more and more challenging over the past several years. Here, we have a great construction team and a great design team, and we hit the ground running on every project we pursue because we really try to be selective about the kinds of clients we work with; we’re not trying to chase everything and be everything.”
BizTimes: You’ve both talked about overlaps in your target market. What types of companies make up your client base and how does joining forces strengthen those relationships?
[caption id="attachment_563023" align="alignleft" width="768"] Ken Krahe, president of MSI General. Photo credit: Jake Hill Photography[/caption]
Krahe: “One of the benefits of the partnership is it doesn’t change our ideal clients; it doesn’t change our target markets. It really complements our current client base. MSI General has a long history (with clients) in the industrial and manufacturing sector, which Tredo Group has great experience with. Certainly, the religious or private education office projects, Tredo Group is very strong in those and has a long history of executing a lot of those projects very well. It’s very complementary bringing the two companies together, and that’s what has led to some short-term successes early on because we’re not trying to change either of us. We’re not trying to do something different. We’re really sticking to our core values of who we are, and that has really led to this transition period being very short and letting us continue to push forward.”
Tredo: “A lot our clients, those project types, building types, one of the themes of a lot of those is they’re really privately held companies. They’re interested in highly functional, efficiently designed and operational facilities, but they want a hospitality feel to their facility, and sustainability is a big part of every project we take on. We’re not doing big medical campuses and things like that; we know where our sweet spot is and a lot of that has to do with companies and organizations that are really at the top of their game. They’re leading their industries and we’re supporting them in that effort. We get some specialty projects here and there which are really cool, sometimes it’s a food-and-beverage- or hospitality-specific (project) or a performance venue.”
Krahe: "We’ve done a few historic renovations recently. But as Jeff mentioned, we’re very strong in our design excellence, we’re very strong in our construction excellence and being able to partner with our clients that have a need: They want to grow their business, they need something to help enhance what they’re currently doing. For us to be able to come in and be a part of that and, for example, help that parish put that addition on their school – or build a new school for that matter – or complete an addition on a manufacturing company, those types of needs are what drives us, and we really feel rewarded at the end of the day because we help them grow their business and in turn it helps us grow as well.”
BizTimes: It sounds like the acquisition has already yielded positive results. What are some of the early, or short-term gains you’ve seen so far? Krahe: “As a company, we operate on the U.S. traction model. Some of the goals, initiatives and metrics that we’ve been using have been adjusted through the dialog that Jeff has brought in, and I think that’s really helped us focus our energy in a different direction than what we were thinking before. They are very subtle changes but important not only to the continued success and continued growth of our company, but it also helps to drive better project success to our clients.”
Tredo: “One of my first weeks here, we chased a project that was a new school expansion for a private school campus. It was on my radar at Tredo Group for a couple of years, and it was a referral that came to MSI General independent of me. We went in together and interviewed against a few other strong teams in the marketplace, and we were the unanimous selection. We would have been in competition with each other in the past; now we’re putting those things together, and we’re seeing it’s well received in the marketplace.”
[caption id="attachment_563024" align="alignright" width="768"] Jeff Tredo, vice president - director of design at MSI General. Photo credit: Jake Hill Photography[/caption]
So, the response from clients has been positive?Krahe: “I’ve gotten nothing but compliments (on) the partnership, and it’s also fun when you show up at a meeting with Jeff and they’re surprised to see him, which is exciting. All good surprises.”
BizTimes: What projects are you most excited about this year and beyond?Krahe: “We’re very excited about the opportunities that we have in front of us; there’s a lot of good dialogue and a lot of good momentum in a forward direction. Certainly, there are some supply chain issues and some labor issues that we’re navigating just as everyone else is, but with our teamwork and truly our partnership model with not only our clients but our subcontractors and our other consultants, that transparent communication is what leads to successful outcomes. I’m very excited about the future, I think for 2023 and beyond we’re in a really good place, and we’ve got a lot of good momentum to having continued success.”
Tredo: “We can’t necessarily list specific projects because they’re not under contract yet, but we’re seeing a lot of strong activity from the private education and charter school world. It’s been a lot of the background for my work with different clients. Tredo Group just finished the Luxe Golf project (at Ballpark Commons) in Franklin, which was a big deal for us. We did a few projects on that campus. A lot of the work that I’ve done with places like charter schools or private operators in Milwaukee – whether it’s Wisconsin Lutheran High School, St. Marcus (Ministries), Eastbrook Academy or Milwaukee College Prep – those are all entities that are planning more projects, and we’re able to keep doing some of that planning work.”
