US giants plan raid on British consultancy sector

Three giant American consultants, Aecom, CH2MHill and Jacobs, are stepping up their hunt for UK acquisition targets.

According to sources close to the firms, they have accelerated their search in recent weeks as a result of the comparatively low valuation of UK companies and a growing sense that the worst of the US recession is behind them – partly as a result of President Obama’s fiscal stimulus.

One source said: “All three are over here and there have been lots of meetings and informal approaches that have come about via partnerships on jobs like the Olympics, Crossrail and the nuclear consortiums.”

In addition to consulting engineers such as White Young Green and Scott Wilson, large QS and project management firms such as Davis Langdon, Cyril Sweett, EC Harris and Turner & Townsend are understood to be in the sights of the Americans.

The valuation of companies is based on the price-to-earnings ratio of listed consultants, which is currently lower in the UK than the US.

One senior source at a large UK firm contacted recently by Aecom and CH2MHill said: “The Americans are keen to increase their project management capability in Europe and now is an obvious time to do it because of the low valuations. These firms are desperate to increase their numbers to make sure they can compete for global projects.”

Another boss at a UK consultant said: “The engineers are talking to everyone. If you look at some of the big infrastructure projects in the Middle East and north Africa, the winners will be those that bring in a huge pool of talent.” The US companies dwarf their UK counterparts (see graphic) and takeover speculation has grown as UK firms have lost out on projects such as Crossrail.

A source close to one of the US companies said: “I’d put my money on a deal being done in the second quarter of next year. Companies may not be planning to sell, everyone has their price.”

Davis Langdon, EC Harris, White Young Green, Cyril Sweett, Turner & Townsend, Aecom and CH2M Hill declined to comment. Jacobs and Scott Wilson were unavailable for comment.