好色先生TV

Of all the things that were not supposed to happen when CBRE took a majority stake in Turner & Townsend a little over 18 months ago, T&T buying Alinea would be somewhere near the top of the list.

Back in the summer of 2021, when the US real estate giant paid nearly 拢1bn for a 60% controlling stake in the then 75-year-old UK consultant, the talk was that this would be another of those moments when new start-ups would emerge like they did when Aecom bought Davis Langdon or when Arcadis picked up EC Harris. New start-ups, like, well, Alinea.

Alinea was born out of that takeover more than a decade ago with several others 鈥� notably Core 5 and Exigere 鈥� also emerging in the wake of the deal.

The firm was set up in May 2013, started by a group of former Davis Langdon and EC Harris partners, and was one of a number created from a torrent of change that struck UK consultants during the credit crunch.

As the effects of the recession continued to be felt, Currie & Brown and Sweett Group met a similar fate, both mopped up by Dar Group. Since then, another US firm, Tetra Tech, has picked up WYG and M&E consultant Hoare Lea. And, of course, CBRE made its move for T&T.

Speaking to 好色先生TV five years ago, Iain Parker, one of the founders of Alinea, explained the reason for going it alone. 鈥淭he landscape for cost consultants changed dramatically. We saw a once-in-a-generation opportunity to replace these household name QSs that were being bought up.鈥�

What T&T gets from the deal

That changed last week, when T&T signed a deal on the last day of January to buy Alinea for a rumoured fee of between 拢25m and 拢35m. The company has already been rebranded Turner & Townsend Alinea.

Ironically, it was CBRE鈥檚 deal for T&T that set in train the events of the past few days. Initial conversations between the pair began quickly after that tie-up was announced, with T&T and Alinea starting exploratory talks in autumn 2021.

The CBRE deal gave us more confidence to be more ambitious and bolder

Patricia Moore, T&T

T&T鈥檚 UK managing director Patricia Moore says: 鈥淭he CBRE deal gave us more confidence to be more ambitious and bolder. Our model has largely been about organic growth. Partnerships can make you risk averse in terms of business expansion, that鈥檚 why an organic progression of growth is generally the way partnerships move forward. But we have a really strong strategic investor behind us that wants us to go faster, wants to back us.鈥�

She adds the firm would have been able to shoulder the cost of the Alinea deal in the days before CBRE came calling but admits: 鈥淭o have the finance to do it and the courage to do it is a different thing.鈥�

Moore says the reason why it has bought Alinea is to give it access to a market the firm has found difficult to get into: the investor developer market in the City of London.

Alinea鈥檚 roll-call of jobs in the City and wider London area includes 22 Bishopsgate, the redevelopment of the British Library, the Merck 好色先生TV at King鈥檚 Cross, 55 Bishopsgate, 8 Bishopsgate, 1 Leadenhall. Its business extends into life sciences work in Oxford and Cambridge.

鈥淲e鈥檝e never really been able to penetrate the City of London and we want to get into the City of London and that is what Alinea is going to help us to do,鈥� Moore says.

While T&T鈥檚 project management business might have made inroads in the capital, its cost management business has struggled to do the same. 鈥淚t鈥檚 been much tighter with the CM [cost management] market and it鈥檚 difficult to break into. What we get with Alinea is access to thoroughbred clients, the blue chips like Landsec, Stanhope, British Land, Chelsfield, all of the big names.

鈥淲ith those investor developer clients, while we鈥檝e made some strides forward, it鈥檚 just been a slow burn really. A lot of that is very relationship based, you have to knock some really good pedigree players off their perch to take their breakfast and that鈥檚 been quite a difficult thing to do.鈥�

Moore says the firm never looked at anyone else, it was always Alinea or bust, and negotiations, which also involved T&T鈥檚 chairman and chief executive Vince Clancy and the UK boss of its cost management arm, Martin Sudweeks, really began to motor last spring before the deal was signed off last month by T&T鈥檚 executive board and CBRE over in the US.

How Alinea will fit into T&T鈥檚 London team

Alinea will now be part of a T&T鈥檚 London cost management business, which will be headed by Parker who will in turn report to Sudweeks.

The London cost management business will now have 350 staff and Alinea鈥檚 turnover, set to be 拢20m for the year to this April, has grown to beyond 拢50m overnight. Given its lease on its Cannon Street base is up next year, Alinea is likely to make T&T鈥檚 office at One New Change its new home where around 2,000 people work.

Growth over the last few years has been smaller than we expected. We have lots of ideas and great ambitions but we got frustrated by our inability to achieve them 

Iain Parker, Alinea

Parker admits it will be strange giving up ultimate control of a firm he helped set up but adds he is not sad it is losing its independence. 鈥淲e propel our business forward by a decade overnight in terms of what we鈥檙e trying to do. We鈥檙e so excited about what we can achieve together, it鈥檚 worth the sacrifice [of losing independence]. There鈥檚 still proud [Alinea] equity partners in the business.鈥�

He is honest enough to admit a day like Monday had increasingly been coming. 鈥淲e haven鈥檛 grown very much for a few years now. Growth over the last few years has been smaller than we expected. We have lots of ideas and great ambitions but we got frustrated by our inability to achieve them because we only have a certain bandwidth. Architects ring us up and say 鈥榙o you want to get involved with such and such a scheme overseas鈥� and I say 鈥業鈥檇 love to but we don鈥檛 have the bandwidth鈥�. It鈥檚 a different answer now.鈥�

He says the firm will eventually be able to look at different sectors, different parts of the world. 鈥淔rom a geographic and sector perspective, it changes a lot. For now, the focus is London but the impact over time will go broader than London, to the rest of the UK and then international.鈥�

Scaling up

There is a wider point here about scale and how smaller firms with ambition like Alinea can compete with bigger firms like T&T. The answer, on the face of it, is that they cannot.

It鈥檚 difficult to grow a business nowadays, you get to a level and then what comes upon you is the increasing cost of compliance. It takes a lot of money to invest

Patricia Moore, T&T

Moore says: 鈥淚t鈥檚 difficult to grow a business nowadays, you get to a level and then what comes upon you is the increasing cost of compliance. It takes a lot of money to invest. We scaled our business in easier times but it takes a long, long time.鈥�

>> Also read: A decade of Alinea: from birth to buyout

And here are some numbers to underline that point. T&T has 10,000 staff around the world, 4,000 in the UK. It has 118 offices in 50 countries. Its turnover last year was 拢844m. Alinea has 110 staff and one office. Last year its income was 拢15.6m.

Mark Lacey, another founding partner of Alinea, points to the work T&T is doing around whole-life carbon. 鈥淲hat chance, as a business of 110, have we of getting into that space? There鈥檚 quite a few commissions where we have had to go and outsource cost management expertise because we don鈥檛 possess it internally. We鈥檝e now got that capability in house.鈥�

For Alinea鈥檚 peers, Monday鈥檚 announcement caught them off-guard. 鈥淚t鈥檚 a big shock, actually,鈥� said one. 鈥淚 didn鈥檛 think they wanted to work for a large US consultancy business having left one. They were the industry flag-bearers for independent QSs. It all feels a bit out of character.鈥�

Another adds: 鈥淚鈥檇 always thought they wanted to pass it down to the next generation but it boils down to what motivates people. I鈥檓 sure they鈥檒l be saying it鈥檚 business as usual but time will tell.鈥�

And he warns there will be some at Alinea thinking the same way as the firm鈥檚 founders did a decade ago. 鈥淭he conversation will have changed for some and it鈥檚 an inevitability some will leave as a result, even if it鈥檚 only one.鈥� Another predicts 鈥�10 or 15 could drift away if they get a good client base鈥�.

Parker says that the seven equity partners of Alinea, all of whom now become very wealthy, will become equity partners at T&T and the initial amount paid out by T&T will be shared between all of the firm鈥檚 110 staff, none of whom, he adds, will lose their jobs as a result.

Conversations about who gets what started this week and the criteria being discussed for payouts includes seniority, longevity and 鈥渃ontribution to the business鈥�. Parker says there is no golden handcuffs deal, requiring him and his colleagues to stay at T&T for a set period of time while the equity partners have kept a 鈥渟ignificant鈥� sum in T&T.

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鈥淲e鈥檙e going to raise the bar going forward,鈥� he says. 鈥淲e鈥檝e got the environment, the platform, the people, everything we need to really push on. The language we talk about is joining forces.鈥� Moore adds: 鈥淚f this was transactions driven, we would have just bought Alinea, we wouldn鈥檛 have made them partners and we鈥檇 have paid them cash and they would have gone. We鈥檙e bringing them [the partners] into the fold.鈥�

Moore, Parker and Lacey say the move will be a shake-up for the London cost management sector. 鈥淭here鈥檚 a very small overlap between the two,鈥� Moore says. 鈥淲e鈥檙e bringing all the best of it together. We鈥檙e seeing this is as a disruptive force and the competition will be really nervous about that.鈥�

For all that, the deal has an end of era feel to it all. The shock 鈥� and for some sadness 鈥� will wear off eventually but it feels a bit like your favourite band ditching the independent label they made their name on and signing up with a major. 鈥淚t鈥檚 so different to what they鈥檝e said in the past,鈥� one rival says. 鈥淭hey鈥檙e good guys and fair play to them. But it鈥檚 a shame, I think.鈥�