Gleeds buys New York consultant to target US

Quantity surveyor Gleeds has acquired a New York-based consultant and is to push for more work in the US, as part of an aim to generate half of its business from international work within three years.

The company has acquired programme management company ProjectConsult for an undisclosed sum, giving it an office in New York and in Sao Paulo, Brazil. The firm, which offers project and cost management services, has worked on schemes including the JetBlue airline facility at JFK airport and the Metlife Stadium, home to the New York Jets and Giants.

The acquisition of ProjectConsult, which turned over in the region of £1.5m last year and employs about 12 staff, will give Gleeds a permanent base in New York to add to its presence in Atlanta, where it has an office of about 35 staff. Chairman Richard Steer (pictured) said Gleeds would use the deal to target the New York fit-out market and to work with major US architectural practices in the states and internationally.

In the fullness of time, the UK will be a very small part of Gleeds’ overall turnover

Richard Steer, Gleeds

He said that the model of buying “boutique consultants” is one that Gleeds wants to replicate in other overseas markets, including Australia, the Far East and central Europe, in order to grow its international business. He said: “We are trying to expand our service base in the UK and geographically across the world. At the moment, about 30-35% of our business comes from overseas, but the UK is a mature market and we want to grow. In the fullness of time the UK will be a very small part of Gleeds’ overall turnover. I’d say we’re looking for about 50% of our turnover to be from overseas within the next three years.”

In the UK, Steer believes that the market will be “feeling the pinch for the next 10 years.” He said: “I can see it being the end of the next parliament before things get going. I don’t see what there is to change the fundamentals of the economy, so I think there will be quite a flat few years.”

In contrast to rival consultants in the sector, such as Davis Langdon, which have recently merged with larger firms, Steer says he is committed to growing Gleeds “as an independent business.” He said: “Never say never, but we have seen fallout from other mergers, where we’re taking on people, partners, who have left those businesses in a hurry.” He added that he believes clients “want to feel they can access the senior partner or chairman,” which could be lost in a large scale merger.

But is he concerned that, with rivals carrying out mega-mergers, a firm of Gleeds’ size could struggle to compete on large projects? “I think the pendulum is swinging this way at the moment, towards large takeovers, but eventually it will swing back,” he says.

“We are working on massive projects in countries like Qatar and Egypt, so we do have the capacity to work on large schemes on our own account. But I see the more crucial thing as the fact we’re offering independent cost and project management, which I still think many clients value.”

Steer said that Gleeds would seek to grow largely organically in China and India, but was seeking to make an acquisition to kickstart expansion in Australia. Gleeds has not had a presence in the country since selling its business there to an MBO in 2009.

He said that the strategy of making niche acquisitions overseas had not been adversely affected by the Bribery Act, despite industry fears over the difficulty of controlling local management in overseas regions. He said: “The point about taking on small organisations is that culturally we can get together very quickly. We always move two or three Gleeds staff in to bring the culture through. Long before the Bribery Act we have faced ethical problems, and hopefully we always come out on the right side of it.”

Steer said that Gleeds would seek to grow largely organically in China and India, but was seeking to make an acquisition to kickstart expansion in Australia. Gleeds has not had a presence in the country since selling its business there to an MBO in 2009.

He said that the strategy of making niche acquisitions overseas had not been adversely affected by the Bribery Act, despite industry fears over the difficulty of controlling local management in overseas regions. He said: “The point about taking on small organisations is that culturally we can get together very quickly. We always move two or three Gleeds staff in to bring the culture through.”

Long before the Bribery Act we have faced ethical problems, and hopefully we always come out on the right side of it.”