Mergers will remain on the menu for some time

We can expect more deals like the purchase of MWH for £560m by Canadian engineer Stantec. 

The purchase of MWH for £560m by Canadian engineer Stantec a week or two ago to create a 22,000 strong operation comes in the wake of the surprise acquisition of the UK multi-disciplinary firm BDP by the Japanese engineer Nippon Koei for £102m. 

Meanwhile, the Swedish firm Sweco has said it is on the look out for more opportunities following the rebranding of Grontmij which it acquired in October 2015.  Following this buyout Sweco’s ranks have already been swelled to 14,500 employees including 800 in the UK, and annual sales of £1.3bn. Legacy consulting businesses within the group also include Carl Bro, Haste, KML and JA Kirkpatrick. 

The latest mergers, Stantec and MWH and BDP and Nippon Koei certainly make sense from a strategic tie up with little overlap. Their combined forces enlarge global reach and expertise. Cultural fits are never guaranteed of course - and it will be interesting to see what the corporate chemistry will be like between the largely architectural practice BDP and its new engineering parent company the other wide of the world -  on the whole, as these firms come together two and two does make five.

Though there will always be space and good business to be had for niche independent players, the drivers for these mergers haven’t gone away not will they anytime soon. There’s the perceived need to bulk up to make the most of global opportunities whilst reducing risk. There’s an emerging trend of the consultant-contractor hybrid, with Stantec, Jacobs and Aecom (to a less of a degree) offering design and build. And in an era where a younger generation aren’t queuing up to become equity partners in employee owned firms, suitors with deeper pockets provide a welcome pay day for those looking to cash in on their hard work.