One year after being bought by Atlas Holdings, the contractor’s chief executive tells Dave Rogers what is coming next
“Of course it rankles, they were hard blows to take.”
Bovis chief executive David Cadiot is recalling the time when, in the wake of previous owner Lendlease’s decision to sell its UK construction business, jobs it thought it had won began to melt away as uncertainty about its future took over.
Two years ago this month, Lendlease announced that it was selling the business it had owned for 25 years. It was a bank holiday Monday in the UK, meaning that its timing was queried. Some said it was insensitive to announce the news when everyone was off work, given that it was also selling businesses in the US when it was a public holiday over there as well.
Cadiot says he was only told on the day of the announcement. “We had an inkling it might happen, though we thought it might happen a couple of years later. It was a big shock to the business as a whole.”
Clients were on the phone straight away, wanting to know what was happening. The problem was, nobody really knew – as the deal was being handled in Australia, where Lendlease is based. “It would have nice if the sale had been done behind closed doors,” is Cadiot’s rueful admission.
Because Lendlease was a publicly listed company, everyone knew that it was up for sale. “We had a good nine months of uncertainty. It’s difficult to win and bid work in those circumstances. Clients don’t know who’s going to own you, who your backers are going to be, what your covenants are going to be.”
He might not have liked it but Cadiot understood why some clients wavered and rebid jobs. Schemes it thought it had won suddenly were retendered: British Land’s Euston tower, CO-RE’s redevelopment of the old ITV Studios site on the South Bank, better known as Project Vista, and the Dovetail building off Bishopsgate in the City being built by Brockton Capital.
“Why would you enter into a contract with someone you don’t know the future of? We understood their decision-making, but it was hugely frustrating. It helped develop a bit of a siege mentality in the business.”
A few weeks into the sale process, at the end of July 2024, Cadiot found himself front and centre when he was appointed managing director of the company after former boss Simon Gorski suddenly left.
Gorski had told Building the previous month that the sale should not drag on, that it was in no one’s interest for it to do so. “We need to do it at pace,” he said at the time. “We need to move quickly and diligently. We don’t want an extended period of uncertainty.”
Cadiot has warm words for Gorski and the points he raised in that interview, given that it was just two weeks after Lendlease’s announcement. Gorski was looking out for staff over here, he says.
We had a very limited time to keep the business together, otherwise we wouldn’t have had anything to sell
“Simon was in a very difficult position. He had to hold the business together externally with clients and internally with staff. I remember the interview and what he said and he wasn’t wrong.
“We had to go fast. We had a very limited time to keep the business together, otherwise we wouldn’t have had anything to sell. His view was absolutely correct. Lendlease was managing its shareholders, not our market.
“He was as frustrated and shocked at the sale process, and the public nature of it and the damage it was going to do to our business, as everyone else. He was trying to drive a timescale that was right for the business.
“To some extent, he laid out the parameters so, when I came along, I didn’t have to – that ‘this is the problem, this is what we’ve got to deal with and you’re not going to have anything to sell unless we go fast’.”
Cadiot’s appointment as managing director came nearly 30 years after joining Bovis as a trainee commercial manager in 1995. Bovis luminaries at the time included chairman Sir Frank Lampl and John Anderson, who when Cadiot started out was boss of its construction arm.
Bovis was then part of P&O, the shipping and property business whose head office was in Pall Mall and which was headed by Lord Sterling, whom The Guardian once described as representing “much that was best from the old school of doing business, when things like integrity, being as good as your word and behaving like a gentleman really mattered”.
The times when Sterling, presenting P&O’s annual results, would pivot from talking about cruises in the West Indies to progress on the Bluewater shopping centre, which Bovis built in the 1990s, were quite a switch.
But P&O’s stewardship of its construction arm, which had begun in 1974, came to an end in 1999 when Lendlease, then led by future Olympic Delivery Authority chief executive David Higgins, stepped in to buy up the firm having been impressed with its work on Bluewater which Lendlease was developing.
A planned float of the business was dropped as a result. “Lendlease bought us to deliver their development portfolio, which they needed to manage,” says Cadiot.
Higgins knew the value of the Bovis brand and, although he left in 2003, it took a long time for Lendlease to ditch the name completely, renaming it Bovis Lend Lease then Bovis Lendlease before dropping the Bovis name for good in 2011 – 12 years after it bought it.
Bovis had been set up in 1885 and, as Cadiot points out: “Only for 14 years of that time has it not been known as Bovis.”
At the time Lendlease announced that it was selling up, Cadiot was executive general manager for Lendlease’s regional business.
“Lendlease committed very early to making sure we got the right kind of buyer that would suit the culture of the business.” The sale was being handled by Australian bank Macquarie and Cadiot says he would regularly head over to its offices in Moorgate to be grilled by prospective buyers.
He says the list of would-be suitors narrowed fairly quickly and he was buoyed by the support he received from clients. “There was a strong message in the commercial office market in London that we can’t afford to lose you.”
And, as ISG teetered and eventually toppled that autumn, Cadiot says the message from the public sector, where Lendlease was carrying out defence and justice work, was similar: “We can’t afford to lose another contractor.”
The eventual buyer, US private equity firm Atlas Holdings, had been alerted to the possibility of a deal by the boss of another of its businesses in the UK, Permasteelisa. Liam Cummins, who knew a thing or two about grand old construction names having started out at John Mowlem, mentioned to Atlas that Bovis was up for sale.
From over there to over here: Atlas Holdings in the UK
US private equity firm Atlas Holdings was begun in 2002 when it bought a paper mill in rural Indiana that employed 85 people. It currently owns 30 companies that employ approximately 75,000 people in 1,200 facilities across the globe.
Based in Connecticut, Atlas’ companies together generate $26bn in revenues annually. In March this year, US funders Blackstone and Blue Owl took a minority stake in Atlas for an undisclosed sum.
As well as Bovis, Atlas owns facades contractor Permasteelisa and recently tried to buy materials distributor Brickability, now renamed BRCK. But Atlas said last month that “it does not intend to make a firm offer for BRCK” after deciding it did not have enough time to carry out due diligence.
Earlier this year, Gareth Lewis, Mace’s former construction boss, joined Atlas in an advisory role. His brief, which runs to a few days a month, covers potential future acquisitions and advising on its current portfolio of businesses in the UK.
Atlas was one of several private equity firms to look at Mace’s contracting business when the group announced it was selling its consulting business to Goldman Sachs last summer. It is also rumoured to have looked at several other tier 2 contractors in recent months too.
“Liam obviously knew us through Permasteelisa. When we were put up for sale, he made the case [to Atlas] that he knew us. That was the extent of it. Atlas buy businesses where they know something about them.”
The sale process included workshops, with Atlas delving into the details of the business – how it was structured, who the management were, what its pipeline looked like. “They bought a good, functioning business,” says Cadiot.
“They didn’t buy a business that needed a turnaround. They know what the industry makes [in margins]. There’s room for growth. They’re not looking to build the business back up and flip it on again. They don’t operate that way, they tend to hold on for the long term.”
He has monthly updates with the Atlas team in Mayfair and quarterly face-to-face meetings. Private equity has not always had the best of reputations, with a slash-and-burn image that usually involves lay=offs, streamlining to boost profits eventually leading to a sale that enriches the firm’s partners.
Cadiot says that is nothing like his dealings with Atlas. “They’re a really solid, friendly bunch of people. They’re good, down to earth people.”
He says that, in fact, Bovis is looking to add more staff to its current 600 – based across its sites and three offices in London, Manchester and Birmingham – while he expects turnover, which in the last nine months of Lendlease’s ownership dropped to £291m, to climb back to more historic levels of between £500m and £1bn.
He is not putting a definitive figure on what its income should be but admits: “We need to go back to those historic levels – that’s what allows us to do projects on the scale of [the towers at] 8 Bishopsgate or 150 Bishopsgate.”
The firm has a £3bn pipeline of work and has recently picked up a string of high-profile deals including 60 Gracechurch Street, the revamp of the London Stock Exchange building at Paternoster Square and St Thomas Yard at London Bridge.
They are all on a PCSA and Cadiot admits: “PCSAs don’t make money for contractors, we have to convert then. It’s a difficult market at the moment, there’s a lot of uncertainty.”
If we don’t have certainty in the first half of the year, we [the industry] are going to have problems. The outlook has flattened
This year began in an optimistic mood, certainly in the London commercial market. In January, investors and developers were more confident, interest rates were expected to drop, sentiment was on the up. Then, at the end of February, the US and Israel launched attacks on Iran with the conflict still going on today.
“People are nervous,” says Cadiot. “If we don’t have certainty in the first half of the year, we [the industry] are going to have problems. The outlook has flattened.”
Its turnover is split roughly equally between private and public sector work and London and the regions. It concentrates on three core areas in the public sector – defence, justice and hospitals. It was recently named one of 10 firms on the New Hospital Programme framework and it is expected to find out shortly what work it has picked up in the first wave of jobs being let.
Like all contractors, Cadiot wishes decisions about jobs, public and private, could be made faster, but is not so tin-eared to see an irony. “Contractors have forever been banging on the table to clients to get us involved earlier. Now I’m hearing, ‘it’s taking too long’. In a different market, maybe we wouldn’t be moaning so much, but right now, if we had more work on, we wouldn’t worry quite so much.”
He says several schemes that it might have been favourite for – given the pipeline of work planned by Lendlease’s developments arm – aren’t certainties anymore such as jobs to redevelop the area around Euston station. “We’ll have to bid them like anyone else. There’s going to be tough competition.”
In recent weeks, the firm has completed jobs, won before it was put up for sale, for GPE at 2 Aldermanbury Square and 334 Oxford Street, the former Debenhams flagship, for Ramsbury & Capital Real Estate Partners LLP.
“After the [Atlas] deal, we had to refill our order book,” Cadiot says. With several jobs being retendered and won by others, “it meant we had very strong teams available and all lined up to deliver the next tranches of projects”.
It has a small team left on the Google headquarters building in King’s Cross, which it built under a construction management deal, while it is bidding the 18 Blackfriars mixed-use development in Southwark. But that has been stalled for months now and Cadiot admits: “With these big schemes, the bigger they are, the harder they are to get away. Our task when we are bidding is picking the ones we think have the most likelihood of going ahead.”
At 49, Cadiot has spent most of his adult life at Bovis, joining it when it was based at Harrow in north London. After leaving Harrow, its tour of London office locations has seen it since take in Regent’s Place, Paddington, a sojourn at Stratford before arriving last year at Eversholt Street next door to Euston station.
Names are important. Get something easy to pronounce and easy to spell
When it bought Lendlease, one of the first things Atlas did was to rename it Bovis. “A no-brainer,” says Cadiot. “It’s the power of the brand. Why did Lendlease hold on to the Bovis name for so long? Because of the power of the brand.”
For nostalgics, alas, the Bovis hummingbird, which dated back to the 1970s, didn’t make it. “We decided we needed something a bit more today.”
There is another equally well-known firm – if slightly younger – set to change its name this year, so does Cadiot have any advice for Mace? “They need to work out what they stand for, what they believe in and have a name that reflects that.”
There is one other thing that Mace should consider, he says, which he explains with the following story. Skanska had bought Kvaerner’s UK construction arm in August 2000 and Cadiot was at the annual Little Britain sailing event for the construction industry on the Isle of Wight a few weeks later. The Kvaerner boat at the event had suddenly became rather outdated, so some bright spark crossed out the name on the side of it. It was replaced with “Skanska – easier to spell”.
Cadiot says: “Names are important. Get something easy to pronounce and easy to spell.”
All archive pictures from Bovis/ all portrait shots by Tom Campbell
What’s in a name? Rather a lot
When he arrived at Bovis in 1995, David Cadiot was joining a company steeped in tradition – one that had been set up in 1885. At the time he joined as an undergraduate on the firm’s trainee scheme, it was owned by P&O and chaired by the late Sir Frank Lampl, a survivor of the Auschwitz and Dachau concentration camps in the Second World War.
In 1971, when Sir Frank was 42, he joined Bovis, where he would go on to spend the rest of his career rising through the ranks. A businessman hailed as the man who turned the firm into a powerhouse, he became chief executive, chairman and then life president of the group before retiring in 2001 aged 75.
It was Sir Frank who sanctioned the sale of the firm to Lendlease for £285m in 1999.
Like a handful of contractors with a starry history, Bovis’s list of jobs is long and impressive: it built One Canada Square at Canary Wharf, the Lloyds building in the City while its US arm helped with the clean-up after the September 11 attacks on New York in 2001.
It also nearly rebuilt Wembley stadium, forming a joint venture with Multiplex for the job only for the latter to go it alone and become engulfed by the melee that ensued.
Among Cadiot’s favourite buildings is the 1980s-built Lloyds building – now grade I listed – and not just because Bovis built it. “I like things that are a bit modern, it’s a bit different that one. I don’t know if it would get built these days.”
Like John Laing, Bovis has been a bit of a production line for industry leaders, with notable former employees including Neil Martin, now chief executive of Sir Robert McAlpine, and Jason Millett, now chief executive of Mace.
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