The bid is backed by the management of stock exchange-quoted Lambert Smith Hampton and had been accepted by 39.5% of its shareholders by last week. The move will see Atkins acquire 1000 staff and £47.5m in turnover.
The two firms first held talks last year, and on 1 May 1998, Lambert Smith Hampton made a stock exchange announcement saying it was in talks with a mystery party “which may or may not lead to an offer”.
This party is understood to have been Atkins, but the talks were broken off 11 days later.
Asked why the firm had not been sold to Atkins last year, Lambert Smith Hampton chairman Bruce Brown would only say: “At any time, we are always talking to different people. We must have talked to 20 parties in recent years about various deals.”
Ambitions to be world leader
Atkins chief executive Mike Jeffries said the deal was part of the firm’s bid to become the world’s biggest provider of technical and construction services. Both parties said their businesses would be complementary, because they overlap in very few areas.
Lambert Smith Hampton has a strong regional presence and has a steady fee income from providing Corporation Tax ratings for occupiers and small transaction work, rather than the more volatile, larger transactions that some agencies specialise in. Brown said he hoped that Lambert Smith Hampton would be able to direct work towards its parent’s construction consultancies and said it had already awarded Atkins some M&E work.
Asked if he was concerned about clients questioning the company’s objectivity in recommending Atkins or other consultants, Brown said: “Patently, it is incumbent on us to ensure that Atkins provides the best value for money if it is awarded work. Atkins will be on our tender lists, but clearly the client’s interests come first.” Jeffries said: “With more firms merging and moving into a variety of fields, there are increasing areas where there are conflicts of interest, which have to be managed very carefully.”
Autonomy for agent
He said that Lambert Smith Hampton would be left to operate independently within Atkins’ property arm, which also includes QS Faithful & Gould. It will retain its name but will not get a representative on Atkins’ main board. Lambert Smith Hampton’s Brown and managing director Nick Stagg will stay with the company.
Stagg said Lambert Smith Hampton had decided to sell to Atkins because the firm was struggling to get any bigger on its own. He said: “With a market capitalisation of £35m-40m we were very much off the radar screen of the big institutional investors that might have helped with an expansion. We have been frustrated at every turn in expanding our business through acquisition.”
