Hugh Blackwood says URS wants a global footprint while Scott Wilson plans to break into North America
Scott Wilson chief executive Hugh Blackwood has said the case for a £161m takeover by American firm URS is “compelling”.
Speaking after URS made public its interest in buying Scott Wilson this morning, Blackwood said: “It’s compelling for our customers. Myself and the CEO of URS have an aligned view that bigger and more complex projects require bigger companies to do them.”
He added that Scott Wilson was attractive for URS because it provided access to markets such as China, India, Eastern Europe and the Middle East. He said: “URS is a large organisation but confined to the US.”
He said the deal would also allow Scott Wilson to crack the US market, which was important given the uncertainties around public spending in the UK. “If you want to be a global player you have to be in North America. There are opportunities in high speed rail, mining and power projects. We are complementary to URS because we are more front end and they have a downstream construction management role.”
Following the URS offer, US rival CH2M Hill announced it was also studying a takeover of Scott Wilson and said it would make a further announcement shortly.
Asked whether Scott Wilson would consider an approach from CH2M Hill if it upped its price, finance director Sean Cummins said: “URS are the favoured route because they were first in the game and over the past two months we have built up a relationship with them. We can only make decisions based on facts so if new facts become available, under our fiduciary duties, we would have to examine them.”
He added: “The reason we favour URS is not purely based on price. There are a lot of other softer areas to consider as part of the whole picture.” He declined to go into further details.
Scott Wilson’s share price has risen 64% since the start of the month to 223p on the back of the takeover speculation and the market cap was this morning above the £161m offer price, standing at £163m.
Asked whether the Scott Wilson name would be retained, Blackwood said: “Nothing has been decided but the name will stay as long as it is commercially appropriate to do so.”
Blackwood and his top team will stay on at the newly merged company but he admitted there may be some back office redundancies, although numbers were likely to be small due to the small geographical overlap.
Blackwood said: “This deal is predicated on growth not cost savings.”
Unless other offers are forthcoming, Cummins said the URS deal was due to go through on 10 September.