Babtie has 2500 staff worldwide and Allott will add about 500 to create a 3000-strong group with an estimated annual turnover of £120m in 2000. The merged company will be called Babtie Group, but the Allott name will be retained for certain projects.
Both parties stress that the deal is a merger rather than an acquisition. However, there is no seat on the main board of Babtie for Allott chief executive Alan Smith.
Babtie chairman Henry Perfect said: “Allott’s chief executive will take up a position as a director on one of our business centre boards. These are very powerful bodies within the group.”
No job cuts have been announced, but Perfect said: “We have offices quite close to one another in the Midlands and the South. We also have three offices in central London. In an ideal world, we would want to aggregate our operations. We will look at this.”
Babtie says the merger is necessary as the market has shifted in favour of large companies able to offer a full spectrum of services.
Perfect said: “I think we will have to get larger still. But it is not growth for growth’s sake. There are drivers, such as the growth of the private finance initiative. Big five management consultancies such as Arthur Andersen have also begun to blur the differences between management consulting and engineering consulting. Clients, too, are increasingly looking for one-stop-shop services.
“The new group will be able to offer clients a full service from conception through to completion in all the main areas of engineering consulting. Allott’s experience in the power sector is particularly welcome for us as we have been trying to get in on this for years.”