CH2M Hill's wait is over

CH2M Hill’s acquisition of Halcrow comes just over a year after the US consultant withdrew, bruised, from its attempt to take over Scott Wilson.

The collapse of that deal – CH2M Hill’s first serious attempt to take over a UK business – looked at the time to be a major blow for the US firm, which was seeking to build on contract win successes on the Olympics and Crossrail by rapidly establishing a strong presence in Britain.

However, with the announcement today that CH2M Hill will buy Halcrow, it looks as if it was worth waiting a year.

First, and most obviously, there is the asking price: CH2M Hill will pay about £124m for Halcrow, whereas rival US engineer’s winning bid for URS last June weighed in at almost double that - £233m.

Like the proposed Scott Wilson deal, the Halcrow acquisition will catapault CH2M Hill into the top 10 consultants in the UK – but Halcrow’s turnover, £465m in 2010, is significantly higher than the £340m Scott Wilson reported the year before it was acquired.

The deal will give CH2M Hill a stronghold in Europe and the Middle East – regions in which, despite its scale, it has so far failed to establish a sizeable presence. And Halcrow’s expertise in transport will come as a major boost to the US engineer in its native country, where investment in infrastructure is a government priority.

The deal is the biggest move by a US player on the UK market since Aecom bought Davis Langdon – and marks the next step in a trend that most commentators agree is only set to accelerate as US firms seek to cash in on infrastructure and energy opportunities, in particular, in the UK.

There will inevitably be comparisons made with that deal, including with the potential challenges of integrating a UK consultant into a much larger US practice – fuelled by the fact that Aecom and CH2M Hill have similar sized turnovers ($6.5bn and $6.3bn respectively). But the integration in Halcrow’s case ought to be more straightforward – both Halcrow and CH2M Hill are private companies, and indeed they have worked alongside each other on projects in the past.