Hill goes public to fund 2006 UK spending spree

US project management firm Hill International is to list on the US Nasdaq stock exchange through an innovative deal allowing the firm to fast track the flotation process.

Hill will raise $37m from the transaction, which it will use to expand by buying-up companies in the UK and US.

The company aims to double its existing staff of 800 worldwide in three years. A key plank of this strategy includes lifting its profile in the UK significantly.

David Richter, president and chief operating officer, said the firm would buy a number of medium-sized UK project management outfits – of between 100 and 300 people – and was already in talks with some.

The deal, allowing Hill to become a listed stock, is structured according to a new method of raising capital being pioneered in the US. Hill, currently a private company, will merge with a listed company, Arpeggio Acquisition Corporation. In this way Hill becomes a public company.

Arpeggio is one of a new breed of entities being set up for the purpose of allowing businesses to leapfrog the IPO process. It was formed by investors, understood to include hedge funds, solely in order to pull off one deal. Such entities have been christened special purpose acquisition companies (spacs).

Richter said the process would take six months, whereas a normal IPO would have taken two years. Under the deal Hill owns 64% of the combined entity. Arpeggio’s shareholders keep the rest and must leave their money invested in the company.

Hill will raise $37m from the transaction, to expand by buying-up companies in the UK and US

The firm’s board is two-thirds Hill staff and one-third Arpeggio’s but Hill’s full management will stay in place.

Richter will keep his existing job, as will his father, the firm’s chairman and CEO Irvin Richter.

The Arpeggio name will disappear.

David Richter said besides raising cash, the move would lift the firm’s profile and allow it to offer stock options to staff. Hill first revealed that it was considering going public in QS News in May.

But the firm has already begun its acquisition spree. Last month it bought 17-strong outfit Pickavance, which has offices in London and Hong Kong.

In September it bought the Manchester-based dispute resolution arm of Haleys, Maple Consult.