Goldman Sachs moves in to take majority stake in Mace’s consulting business

Mace is selling a majority stake in its consulting business to Goldman Sachs after a deal was announced this morning following months of negotiations.

Rumours about an impending sale of the business began earlier this year with several private equity firms, including Blackstone, linked with a move.

But in an announcement to the US stock market, Goldman Sachs confirmed its private equity arm was buying 75% of Mace Consult. The move will see Consult demerge from Mace to become a standalone, independently-run company.

Mace chief executive Jason Millett (pictured) told Building the firm had been exploring the possibility of selling a stake in the consulting arm since the start of the year in order to be able to compete with larger rivals such as Jacobs and Bechtel. “We want Mace Consult to be the leading global delivery partner. To keep going towards that, you need more investment.”

No financial details have been given but Building understands the amount the US bank has paid runs into hundreds of millions of dollars. In 2021, CBRE paid £960m for a 60% stake in T&T which at the time had a turnover of £660m, similar to Mace Consult’s £687m. 

Jose Barreto, partner within private equity at Goldman Sachs Alternatives, said: “We are delighted to invest in Mace Consult and accelerate its growth trajectory as an independent business both organically and through strategic acquisitions.”

Mace’s main shareholders, including executive chairman Mark Reynolds, Millett, former deputy chairman Mark Holmes and former chief executive Steve Pycroft, all stand to benefit from a huge windfall as a result of the deal which is expected to be formally wrapped up by the end of the year.

Mace said the consulting business will be led by Davendra Dabasia with Reynolds, Millett, Dabasia and corporate strategy director Mandy Willis all retaining a minority stake in the business.

Millett said the four will be “locked in for a period of time” with four Goldman Sachs executives, including Barretto and Goldman Sachs’ managing director for private equity Alex Mass, also expected to sit on the newly configured board.

Reynolds has previously said the consulting business needed outside investment to scale up to compete against the North American consulting giants and in a statement, he said: “This transaction is a key milestone in securing the long-term future of Mace Consult, enabling the next phase of growth for our global consultancy practice. We have established a foundation to enable the business to flourish for decades to come.”

Consult employs close to 6,000 people with more than half in the UK. In its last set of results, the business saw income increase 11% to £687m with pre-tax profit jumping by three-quarters to £78m.

The move means Mace’s contracting business will continue to be completely owned by its shareholders with Millett remaining at the helm.

“As a result of the transaction, Construct will be debt free and even more financially resilient and will have a secure foundation for future growth,” the firm said.

Millett added: “For Construct, there’s not much change. The shareholders stay the same. There will be a substantial reinvestment in Construct.”

Construct employs 2,100 people and is Mace’s biggest business by revenue with a turnover of £2.1bn last year, a rise of nearly a quarter on 2023’s figure.

But pre-tax profit at the division fell from £79m to £15.7m which Millett blamed on the cost of dealing with a problem job, thought to be a data centre in the Netherlands.

The decision to sell a majority stake in Consult means that Mace will now be left to just concentrate on its construction business after the firm sold its facilities management business, which it branded Operate, to its management two years ago. Mace’s development arm was already being wound down at the time of FM’s sale in November 2023.