Canada-listed giant says Mouchel buy will help it rebalance into more public sector work
WSP Parsons Brinckerhoff could snap up more businesses after its £75m acquisition of Mouchel Consulting from Kier last month, the firm’s UK managing director Mark Naysmith has told Building.
Naysmith said the deal - which adds 2,000 staff to the Canada stock exchange-listed giant, of which 1,700 are in the UK - would help the firm increase its public sector work at a time when it is experiencing a “slowdown” in the private sector.
He said WSP PB could buy more businesses, including in project, programme and cost management, after its £24m offer for consultant Sweett Group was gazumped by a £29m bid by rival Currie & Brown earlier this year.
Naysmith said the firm would now look to grow into these service areas organically and through “niche, boutique and complimentary” acquisitions, rather than large scale purchases.
WSP PB’s acquisition of infrastructure specialist Mouchel Consulting rebalances the firm towards more public sector work, taking its ratio of public to private sector work to 60:40.
Naysmith said: “In the current climate, well in any climate, that is a good balance to have. We’ve felt the slowdown in London private sector property, although we’re not feeling it to the same extent outside of London. The reason that we’ve been feeling it in London is because we are very active in the high end residential and commercial markets.
“Now you could say was that Brexit or was it the markets that forced the slowdown. I think it was going to happen anyway because the London property and residential markets, well the valuations and prices were getting silly, so the correction was going to happen anyway and I think Brexit just brought it on quicker.”
Naysmith said the Mouchel Consulting deal took the company into new service areas, including intelligent transport systems and land referencing, which he hopes will help it win further work on HS2, Highways England’s £15bn investment programme and Hinkley Point C.
The acquisition also takes WSP PB into the regulated water industry and provides the company with a greater presence in the northern half of the UK.
Commenting on the abandoned bid to takeover Sweett, Naysmith said: “Not all acquisitions go ahead and Sweett was a good example of one that got to the eleventh hour and then there was a counter offer that came in and we decided that we didn’t want to get into a horse trade and we felt that the valuation that we’d put on the business was good.
“So you know you have to weigh up if you’re going to spend more on whatever acquisition - are you actually going to see the returns to your shareholders and we made a decision that probably, possibly not. So we decided not to pursue that one,”Naysmith said.
WSP PB plans to run Mouchel Consulting as a parallel business for the time being. One reason for this is that the two firms run on different financial years and it will be next year before they can be brought into sync. For the time being the integration is concentrated on the front office side of things and the two firms are already jointly bidding for projects.
Naysmith said: “Its fair to say that we do value the brand and it would be wrong to drop the name overnight so we will look at carrying the Mouchel brand name forward for a period and then we’ll decide as we go into 2017 how long that should carry on for, but we certainly won’t be doing it initially, but a bit like we have done with Parsons Brinckerhoff.
“The thing is it becomes very complicated globally when you start thinking of brands and names because with a company like WSP that continues to acquire you cant just keep adding brands and names onto the end. So there will be going forwards a global view on what the WSP brand and name is, which will include the UK.”