Chief executive confirms company has held talks with ’a number’ of firms amid pressure to expand

Consultant EC Harris has been holding talks with major construction and property consultancies over a potential merger, the company’s chief executive has revealed.

Chief executive Philip Youell confirmed the company has held exploratory talks with a number of similar sized rivals and consultancies from other disciplines over the past year, since it announced its intention to float on the stock exchange in July 2010. The merger discussions are part of the company’s attempts to restructure itself in preparation for a flotation in 2014.

Building understands that EC Harris has already spoken to firms including rival T&T, US engineer URS, and property consultancy King Sturge.

Industry sources say that the firm has also recently been talking to other consultancies not named above. Youell declined to comment on any specific names.

Discussions with the above firms are not thought to be ongoing. The King Sturge talks are understood to have taken place before that consultancy merged with Jones Lang Lasalle in May.

Youell said: “We have set out our stall. In order to be successful we need scale. So we’re actively looking for organisations that share our vision and want to go on that journey with us.”

Youell has previously raised the possibility of acquiring smaller firms, but this week he did not rule out this being a large organisation of the same scale as EC Harris, which employs 2,700 staff and brought in £270m in revenue last year, a decline of 18% on 2009. Last year Youell said the firm needed to get turnover to between £400m and £500m before listing.

“Merging is a simpler way to achieve that growth but it has to be right and we’re looking at all options,” he said.

“I’m conscious there are rumours all the time. We are approached and have discussions all the time, and we’ve had discussions with big names and decided that it’s not appropriate.”

The move comes after EC Harris issued senior partners with “phantom shares” in the company, which will become real when the firm floats. It has also changed its partnership agreement to move towards a corporate structure with a non-executive board as well as executive leadership, which is more like the structure that will be expected of a listed company.

A growing trend

Traditional QS consultants are increasingly looking to diversify by merging with consultants from other disciplines in order to both grow and offer clients a more rounded service offering. Recent examples include US engineer Aecom’s acquisition of Davis Langdon, and the acquisition of Drivers Jonas by Deloitte.