Grontmij to be taken over by Swedish consultant Sweco

Swedish consultant Sweco has announced the acquisition of Netherland’s based Grontmij in a deal worth £257M (Euro 354M).

The new combined business will have 14,500 employees and a £1.24bn (Euro 1.7bn) annual turnover.

“Combining Sweco and Grontmij will create great value for all parties involved,” said Tomas Carlsson, CEO of Sweco. “In terms of growth, Sweco has consistently shown its ability to successfully grow through mergers. Now that our latest large acquisition, from 2013, has been very successfully integrated, we are ready to take the next step on the European market.”

“For our customers, this transaction underlines Grontmij’s competencies and it strengthens our abilities to take on the most challenging projects." Michiel Jaski, CEO of Grontmij.

Throughout 2013 Sweco consolidated its presence in the Nordic market making a string of acquisitions. The largest of these was the July 2013 purchase of transport consultancy Venture from the Swedish Government which the firm says has exceeded its expectations. This was followed by the acquisition of Sweden’s PICAB in August 2013 and Finish consultant Tocoman Services in November 2013.

It is intended that the acquisition of Grontmij will provide the company with a platform for growth across other northern European markets including the UK. Sweco has described the geographic fit as “near perfect”.

Grontmij’s executive board and supervisory board have unanimously supported the offer recommending it to shareholders. “Grontmij has made significant progress since 2012 with its ‘Back on Track’ strategy. We have successfully stabilised and refocused the company, and have now reached a strategic crossroad. Looking at the future of Grontmij and the trends in our industry, we are convinced that merging with Sweco is in the best interest of all our stakeholders,” said Michiel Jaski, CEO of Grontmij.

“For our customers, this transaction underlines Grontmij’s competencies and it strengthens our abilities to take on the most challenging projects," he added. "Our people will benefit by becoming part of the leading European engineering and consultancy firm, offering more resources and long-term opportunities to develop their capabilities. For our shareholders this is an attractive offer, and at the same time an opportunity to participate in the future of the combined company.”

Although Sweco has completed a number of successful acquisitions the Grontmij takeover is by far the largest deal to date. Following completion the company expects to make operational improvements of £19.6M (Euro 27M) per annum which will be 90% realised in the first four years after the deal.

Following the deal three current members of Grontmij’s executive committee, Ina Brandes, John Chubb and Ton de Jong, will be members of the existing Sweco executive team. The current Grontmij executive board members, Michiel Jaski and Frits Vervoort, will see to a proper handover and set up of the integration agenda during a certain period after settlement of the offer. They shall resign as member of the executive board of Grontmij some time after settlement.

The move comes after a raft of consolidation moves in the market which saw WSP complete its £820M deal to buy Parsons Brinckerhoff in February 2015; AECOM complete the £3.7bn ($6bn) merger with URS in October 2014; and Netherlands based ARCADIS acquired Hyder Consulting in a £296M deal.

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