Clients who have had a close relationship with a consultant they see as independent and free thinking could hesitate before employing a more impersonal multinational
We said at the start of the year 2010 would be the year of the deal. And boy, is it coming to a head. The depth and the severity of the recession, the exposure to the Middle East, along with the bargain basement price of our listed consultants and the overpowering wealth of the US firms, are all forcing the pace to hot up.
This week we have two American consulting giants, URS and CH2M Hill, slugging it out to buy engineer Scott Wilson. A decision on whether Davis Langdon throws in its lot with another US giant, Aecom, is imminent. And we’ve already had engineering consultant VT bidding for Mouchel, before itself being subject to a takeover from rival Babcock; and Drivers Jonas merging with Deloitte. Others, meanwhile, are coming up with alternative strategies to turn themselves into global players. EC Harris put its cards on the table this week - disclosing that it will seek listing in three years’ time. Turner & Townsend says it plans to do likewise when the market recovers.
Recession always forces the pace of change. In the downturn of the nineties the saviour came in the form of millennium projects funded by the lottery. Tomorrow’s opportunities are building power stations, wind farms, waste treatment plants and rail networks - not just in the UK, but around the world - all sectors that are undented by recession. Such projects, because of their long gestation periods, often require consultants with large resources.
Many in the industry will certainly feel pleased that EC Harris has opted to go it alone and will feel deeply saddened should Davis Langdon be swallowed up by Aecom. The fact is that for these large firms that already have global reach, the status quo is not an option. But neither is success guaranteed by a merger or flotation. Both bring their own distinct pressures - dealing with the vagaries, whims and often excessive aspirations of the stock market, alongside the potential clashes in culture and the tiny cog in the big wheel nature of US takeovers.
For their part, US firms seem hell bent on expansion at any price.
Meanwhile, UK partners that might have had plenty of clout in a practice where the bulk of the fees came from the development sector may find themselves at odds where the focus becomes infrastructure-based. And similarly, clients who have had a close relationship with a consultant they see as independent and free thinking could hesitate before employing a giant, more impersonal multinational.
So life moves on, names will disappear, but in their place new, smaller ones will emerge. Expect to see a number of individuals and groups breaking away from the big corporates to capitalise on providing this personalised service.
Denise Chevin, editor
Hurrah! A construction story to celebrate. As this week’s special issue shows, that story is the successful delivery of the Olympic park and venues in east London. Budget-wise, the figures are a far cry from the spiralling costs associated with Wembley. Out of an available budget of £8.1bn, David Higgins reckons it could have spent £7.4bn by the time everything is finished. But this doesn’t mean cheap and cheerful. It’s true the main stadium is more about function than style and the less said about the media centre the better. But the aquatics centre, although expensive, will look great and the velodrome is a fine example of what can be done with limited funds - it’s as finely honed as any Olympic athlete. And there are some impressive temporary structures, too. Now the landscaping has started, you start to get a sense of what the finished project is going to look like. And that is a vast improvement on the dereliction swept aside by this project - and a huge boost for east London.