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EC Harris is finally achieving the rapid expansion it has so long desired - and in some style. The UK-based consultant, which was never shy about its growth ambitions and once considered floating on the London Stock Exchange to achieve them, was taken over by one of the world鈥檚 fastest growing construction companies, Amsterdam-listed giant Arcadis, a year ago this month.

The Dutch powerhouse is on course to grow turnover by a third to around 拢2.5bn in the current financial year, fuelled by a buying spree that has included EC Harris and the former Asian arm of Davis Langdon, the 拢79m-turnover Davis Langdon & Seah, which it bought in April.
Philip Youell, EC Harris chief executive, now enjoys access to a global workforce of 21,000 people. But from his perspective the hard graft starts here. 鈥淲e joined in order to create a bigger, powerful, global-leading business. It鈥檚 not going to be done in one year.鈥�

Speaking in the top floor boardroom of the consultant鈥檚 swankily converted former railway warehouse near King鈥檚 Cross station, north London, Youell reveals how EC Harris aims to capitalise on the takeover, learn from the mistakes of past industry deals and integrate and re-brand its divisions.

EC Harris, an Arcadis company

Youell says EC Harris has secured a 鈥渦nique鈥� takeover arrangement with Arcadis, protecting its limited liability partnership status and a degree of independence.

EC Harris remains a separate operating company within the Arcadis group and its partners retain 30% of the company鈥檚 profits. Along with several other Arcadis subsidiaries - including US-based architect RTKL and Asia-based Langdon & Seah - the operating company reports to Arcadis鈥� global management, the most relevant director to EC Harris being Arcadis鈥� global director of buildings Matt Bennion, himself a promoted former EC Harris director.

While there鈥檚 an emphasis on devolved responsibility, the process of integration within the Arcadis group鈥檚 international markets is well under way. The operating company with the most dominant position in each international market will take the lead and absorb the workforces of the others. In the UK, 450 Arcadis staff are being absorbed into EC Harris from December, with offices merging in Bristol, Exeter, Birmingham, Manchester, Leeds and London. In Europe EC Harris staff are being absorbed into Arcadis. Asia is an exception, where EC Harris and Langdon & Seah will continue to remain separate, but collaborating, operating companies. Youell says he鈥檚 confident of a smooth transition: 鈥淲e put six months aside to really try and understand each other. We didn鈥檛 dive in and make the decisions.鈥�

The integration process will result in 20 support staff redundancies, with no reduction in technical staff numbers at EC Harris and Arcadis, Youell says. EC Harris will begin marketing itself as 鈥淓C Harris, an Arcadis company鈥� from January.

Commercial benefits

But has the takeover helped EC Harris commercially during the first year? Youell says there are already 鈥渃lear鈥� commercial gains, including 拢40m of wins he says 鈥渨ould not have been won鈥� without the combined expertise of both firms. These include a deal to project manage the expansion of Guarulhos International Airport in S茫o Paulo, Brazil, combining EC Harris鈥� airport demand analysis and Arcadis鈥� engineering skill.

In addition the companies have identified 拢200m of 鈥渟pecific opportunities where our joint capabilities will be the reason we win鈥�, Youell says.
The benefits are beginning to show on both companies鈥� balance sheets. Arcadis鈥� third quarter results, published earlier this month, revealed EC Harris and Langdon & Seah contributed 26% of the firm鈥檚 34% growth over the period. Youell discloses EC Harris is on course to achieve organic growth of 6-7% this financial year and predicts 12% organic growth next year. He adds that the firm is set for a 25% rise in profitability this year to an operating margin of 鈥渁bout 8.4%鈥�, which he partly puts down to some 鈥減retty neat approaches to commercial management鈥� learned from its parent company.

But the most important thing for Youell is that Arcadis shares EC Harris鈥� vision for building a global 鈥渂uilt asset consultancy鈥�. EC Harris launched the concept of built asset consultancy four years ago, which essentially means offering consultancy across the whole life cycle of a building, through planning, design, building, operation and potentially back round to redeveloping an asset. Youell says Arcadis is able to plug some of the gaps in this cycle, using both its engineering and environmental expertise. But critically he adds Arcadis is 鈥渆xtremely keen to roll out the built asset consultancy approach across the whole of Arcadis,鈥� not least because it gets the firm involved at the 鈥渇ront-end working directly with clients鈥�.

Perhaps unexpectedly Youell says the 鈥渕ost exciting鈥� potential growth market for EC Harris鈥� built asset consultancy concept is the mature market of the US. He says there is an opportunity for the firm to leverage Arcadis鈥� 6,000-strong business in the country and 鈥済reat relationships with global [US-based] clients鈥�. The demand is there, he says:

鈥淚 think there鈥檚 a real change in the US market that we were smelling before, but we鈥檝e got evidence of it now. The traditional US supply chain doesn鈥檛 have the answers to new challenges - PPP is only just landing, as is the idea that you should think about the whole asset life cycle - so there鈥檚 a gap in the market for us.鈥�

EC Harris is also targeting further growth in Qatar - where it鈥檚 working with Qatar 2022 World Cup delivery partner CH2M Hill - Saudi Arabia and Asia, particularly in the south-east. As for London鈥檚 commercial and residential sectors, the company has recently increased market share with major project wins including the Kohn Pedersen Fox-designed 鈥淪calpel鈥� tower and the planned Renzo Piano-designed extension of Selfridges鈥� flagship Oxford Street store. Youell also expects the firm鈥檚 two-year-old 拢4m-turnover investment consultancy business - EC Harris Investments - to continue to grow on the back of 鈥済reat demand for supporting clients to find money for new deals鈥�.

Keeping everyone on side

Youell says the takeover will ultimately work out as the two firms are a good match and praises Arcadis鈥� 鈥渃ollaborative approach鈥�. But he has his own pet peeves, particularly that Arcadis is 鈥渁 bit behind鈥� EC Harris in integrating its own business, which he says EC Harris achieved through internal restructuring prior to the takeover. This leads to 鈥渄oing the rounds with lots more people than you would have had to do otherwise鈥� which he finds 鈥渇rustrating鈥�.

He also admits that despite EC Harris鈥� best efforts, not everyone is convinced the Arcadis takeover was the right option for the company. He says there are fewer doubters than before the deal, but 鈥測ou still have partners saying 鈥榠t鈥檚 different round here鈥欌��. He says before the deal a number of partners 鈥渨ho had worked for other organisations that were acquired鈥� warned him about the potential pitfalls of a takeover. 鈥淚 had a number of those people telling me what it would be like [if we were bought by a listed firm] and that this would drive us all short term and we鈥檇 lose our values鈥�. Youell says he succeeded in swaying most of the detractors by allowing them to influence the takeover discussions. 鈥淭hey were actually very helpful in telling me how we could avoid those pitfalls and in the way we structured the deal,鈥� he says. Last November all but one of the firm鈥檚 183 partners voted in favour of the deal.

Youell is not complacent about the potential dangers of losing key staff - particularly now as some of the restrictions preventing partners from selling Arcadis shares they were issued are lifted. The final restrictions are to be lifted next year, two years after the takeover deal was signed. He adds there鈥檚 been a surge in recruitment agents and headhunters 鈥渞inging up our people on behalf of other organisations鈥�, ahead of the release of some rewards this month.

The key to keeping partners and staff on board is good communication, Youell says. 鈥淲e work hard to make sure they鈥檙e informed, that they know what鈥檚 going on, that they feel part of it,鈥� he says. In the case of partners he says 鈥測ou have to continue to allow them to influence鈥� and let them know 鈥渢here鈥檚 something in it for the people and their teams - to become partners and earn鈥�. He argues the 30% profit share is 鈥渟till a sizeable amount of money for people to aspire to鈥� and the set-up is 鈥渄ifferent in a good way鈥� as partners no longer have to put their own money into the business in the form of equity - with potential risk - to reap the rewards, as the business is now funded by the stock market.

Despite Youell鈥檚 minor frustrations it鈥檚 clear on balance he feels the acquisition was good for the firm, allowing it to expand, service an array of new international clients and provide the integrated service he says is hotly demanded. EC Harris finally has access to the scale it鈥檚 been striving for and Youell is clearly eager to capitalise on it.