QS veteran Roger Knowles made a bold return to both the industry and the Stock Exchange this week, putting his money behind a bold attempt to shake up the consultancy market
Just a year after selling up the firm he set up back in the early 1970s for £7m Roger Knowles ignored thoughts of tending to his garden and got straight back into hatching a new business plan. He and former colleague at listed dispute resolution group Knowles, Patrick Lineen, spotted an opportunity. They reckoned there were plenty of medium-sized QS firms dotted around the UK who could strive for more. By joining forces with like-minded outfits operating in different regions the companies could create a more powerful single entity, potentially able to compete with big national outfits such as EC Harris, Davis Langdon etc.
That was the theory, and when I sat down with Knowles and Lineen last autumn to hear them explain it I thought it had merit, but would be hard to pull off. Could they really persuade enough bosses to part with their control, and equity, of their firms? And would the City buy into the potential of quantity surveying as a lucrative draw for investors? Well the answer appears to be yes on both counts. Knowles and Lineen met with around six interested parties and three – Boxall Sayer, Denley King and Fletcher McNeill - have now decided to take the plunge. The trio are to merge into a holding company called Baqus (that’s not Greek as I first thought, it stands for Building and Quantity Surveyors) and plan to float on the AIM market of the Stock Exchange in November. From there Knowles, who is chairman of the holding firm, plans to grow the group speedily, buying two firms a year and raising the turnover from £7m to £20m within two to three years.
According to Lineen, who I spoke to this morning, the City has bought into the concept of a consolidator stepping into the sector and that there is major scope for rationalisation in the market. “There is change going on in the industry,” he said, pointing to the growth of framework deals being offered by clients which threatens to eat into the workloads of smaller players. And Lineen believes now that the idea has transformed from theory to practice the interest from those wishing to join Baqus will increase. “We are not going to challenge EC Harris overnight, but in the future, you never know,” he said. What with the imminent flotation of Cyril Sweett we are in for an interesting few years ahead in the QS world.