Deal marks industry-wide consolidation to satisfy clients, say experts
CH2M Hill鈥檚 swoop for Halcrow marks the latest chapter in an industry-wide consolidation intended to satisfy clients and deal with growing competition from the East, industry experts said this week, writes the 好色先生TV newsdesk.
Industry leaders welcomed the 拢230m deal for one of civil engineering鈥檚 most respected names, as a sensible move in response to the industry鈥檚 accelerating globalisation.
The takeover - expected to be finalised in November - follows CH2M Hill鈥檚 unsuccessful pursuit of Scott Wilson, which was bought by rival URS last year.
Jeremy Horner, chief executive of Europe and the Middle East at Davis Langdon, which was bought by US-based Aecom in a similar deal last year, said: 鈥淐lients are looking for an integrated offer. I see this as vindication of the strategy that we鈥檙e on.
鈥淚t鈥檚 increasingly happening, as we saw with the URS-Scott Wilson deal. The firms who need to worry are the ones who don鈥檛 have a plan in that regard.鈥�
Hanif Kara, founding partner of structural engineer Adams Kara Taylor, said: 鈥淚t鈥檚 important you have organisations like this to compete with China and India. Otherwise there鈥檚 a risk our firms will get left behind. This tie-up will give Halcrow the capacity to compete.鈥�
But he said he felt a degree of sadness that one of British engineering鈥檚 most historic names - founded in 1868 and famous for projects ranging from Second World War tunnelling to Crossrail - had been 鈥渟wallowed up鈥�.
Mark Whitby, director of structural engineer Davies Maguire + Whitby, said: 鈥淚 don鈥檛 blame Halcrow for selling up. The extent of the recession is having an impact on everybody - the option of selling provides a very safe future for the business.鈥�
But he warned the trend for 鈥渂ig companies getting bigger鈥� may not last. 鈥淢any clients do want a one-stop shop, but I鈥檓 not sure that鈥檚 for everybody. There could be a moment where we eventually end up with a few dinosaurs.鈥�
President of CH2M Hill鈥檚 facilities and infrastructure division Jacqueline Rast - who will head the merged company鈥檚 operations outside of the US - said the move aimed to meet the demands of clients who increasingly wanted a wide range of services delivered by a trusted firm with bases throughout the world.
Deal in numbers
锘縋rice paid for Halcrow shares: 拢124m
Price paid in total for Halcrow: 拢230m
CH2M Hill employees: 23,000
Halcrow employees: 6,000
Year of CH2M Hill鈥檚 founding: 1946
Year of Halcrow鈥檚 founding: 1868
Who is Jacqueline Rast?
锘縅acqueline Rast, known as Jacque, is a civil engineer by training with 30 years鈥� experience in the engineering and construction industry.
The personable Italian-American knows the UK well, having overseen CH2M Hill鈥檚 involvement in multi-billion pound projects in this country including the 2012 Olympic Games, Crossrail and the Thames Tideway tunnel.
Further afield, she has helped deliver other prestigious schemes including the Masdar sustainable city in Abu Dhabi and the Panama Canal extension.
Educated at Pennsylvania State University, Rast has a varied background including operating and selling a successful management consultancy firm and specialises in programme management, which she sees as vital to delivering complex projects on time and budget. A member of CH2M Hill鈥檚 board of directors, Rast says she is passionate about the firm鈥檚 localist approach and its promotion of women to senior positions.
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