CH2M’s acquisiton of Halcrow is a prime contender for the deal of 2011 – who’s going to be next?
If Aecom pulled off “The Deal of 2010” by snapping up Davis Langdon, then CH2M Hill’s £230m acquisition of Halcrow this week is in pole position to scoop the prize for 2011. After five years heading the London Olympic park project for the US consultancy, our cover star Jacqueline Rast has emerged as an unexpected and refreshing new industry leader. Once you get past the shock that UK construction is to welcome a prominent, outspoken, American, female boss to the top of the industry, you realise that the deal makes a lot of sense.
First, Rast says the acquisition is driven by client demand and global synergies in much the same way as the Aecom/DL deal - except there isn’t nearly as much noise and emotion attached to the Halcrow brand compared with DL as an institutionally entrenched UK quantity surveyor. And second, the whole deal has been facilitated by a neat cultural fit, a key criterion for acquisition hungry CH2M Hill as it publicly declares a desire for further merger scalps. The two firms have been dancing together for a decade and CH2M Hill also recognises an opportunity in Halcrow’s excellent international reputation and expertise in specific sectors, such as transport.
This particular deal is - according to the firms involved - not prompted by the world’s ongoing economic turbulence. But as we limp into this year’s final quarter, these financial woes are the background to Building’s CEO White Paper - released in full this week (see www.building.co.uk/ceo whitepaper and here) - which reveals that half of all companies surveyed expect to be involved in merger activity in the next two years. So who will be next on the US mega merger block? EC Harris? Turner & Townsend? Or will Capita Symonds surprise the pack by making a move? These deals really do have a habit of sneaking up on you.
Chop and change
Three more thoughts for the week:
1. The news that Richard McCarthy is to leave government after a decade of crafting Whitehall planning policy - through its various incarnations - is hardly a surprise, as he joins Capita in the wake of the fallout of the proposed new National Planning Policy Framework. But the timing of the announcement is intriguing.
2. And as the government’s drive to cut £21bn from NHS costs by 2014 continues apace, controversy over its structural reforms deepens.
3. And finally, read the only ever interview with Sir Robert McAlpine’s Benny Kelly. Prankster, personality and the brains behind such high-profile projects as the Olympic and Emirates stadiums, stories about Kelly have entered industry folklore even though he avoided publicity as best he could. As a new generation of the McAlpine dynasty is groomed to take over the firm, it’s worth pausing to ask whether the next generation will also be able to match Kelly’s talent and personality.
Tom Broughton, brand director