Davis Langdon takeover: Making painful progress

Not surprisingly, comparisons are being drawn with Kraft’s acquisition of Cadbury: a quintessentially “English” brand with emotional associations for those who have grown up with it has been swallowed whole by an American corporation - and we’ve all watched enough TV drama to know what they’re like.

Of course, DL didn’t appear in front of the nation after every episode of Coronation Street, but this is the firm that helped to give us some of the most popular buildings of the post-war period, most recently the Shard and Sage Gateshead. And just as Cadbury had a reputation for engagement and technical skill (making chocolate bars is harder than you might imagine), DL prided itself on its ability to build personal relationships with, and provide tailored services for, the country’s best developers. As Peter Rogers of Stanhope makes clear , many of those clients are worried about the change of ownership.

But the cold reality is that, for all its expertise, DL exemplifies a problem with the way the whole of the UK consultancy sector is organised, which is as a patchwork of partnerships. Its recent history, from the takeovers of Mott Green Wall in 1999 to DEGW 10 years later, is of a desperate attempt to grow into an international multidisciplinary consultancy - just like Aecom. And despite its success in the Far East, it simply did not have the capital base or the organisational structure to make it quickly enough: establishing a few overseas offices during a boom is one thing, but now that developing economies like India and Brazil really are developing, this is the ideal time to expand in force. Then there is the need to synthesise knowledge across disciplines so as to offer the client better value for its investment. For all the industry’s talking shops over the past 20 years, this kind of knowledge sharing has never really happened, and Rob Smith, DL’s senior partner, makes the point at length in our interview.

So perhaps a better industrial analogy than confectionery might be drawn with the banking sector. The wholesale deregulation of finance during mid-period Thatcher swept away the City that had evolved over two centuries, from the discount houses that bought government debt to household names like the Midland Bank, and the cosy culture of the stock jobbers was replaced by American banks with turnovers larger than many sovereign states. This made the banks much more efficient, much less personal and, as we know, much more dangerous.

British construction consultants, in their own way, will have to follow suit (preferably without crashing the global economy). In the case of DL, this will be a question of making the most of Aecom’s strengths without losing its ethos. Given the Californian company’s policy of digesting its takeovers, this is likely to be a difficult task, but DL is no stranger to big deals. The modern business was formed from the merger of Langdon & Every and Davis Belfield & Everest in 1986. That raised eyebrows at the time, but with hindsight it was obviously necessary for the progress of the firm. Of cour‘se, there is still a place for small, bespoke outfits - and they may be nourished by experienced staff from DL who opposed the deal.

DL won’t be the last company to find itself in this position, and it won’t be the last to opt for the dramatic solution - as opposed to rivals such as EC Harris, which seem more likely to be the diner than the dinner. Some clients may take their business elsewhere. But the bottom line is that many firms, and the UK sector as a whole, are not operating efficiently enough for the age we’re in, and something - sadly, in this case, a piece of the industry’s history - had to give.

Sarah Richardson, acting editor