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Bidding war looms for Hyder as Japanese firm Nippon Koei outbids ARCADIS

Japanese consultant Nippon Koei has outbid ARCADIS to buy Hyder Consulting for £268.1M, compared to the £256.2M offer from the Netherlands based firm. This represents a share price of 680p versus ACRADIS 650p bid.

“The cash offer from Nippon Koei .... represents a 30 pence premium to ARCADIS offer announced on 31st July,” said Ivor Catto, chief executive of Hyder. “The Hyder board is now recommending the cash offer from Nippon Koei”

The firm said that the board does not currently anticipate any restructuring of the operations of Hyder, any employee redundancies, the closure of any locations of Hyder’s places of business or any redeployment of Hyder’s fixed assets. 

ARCADIS told the London Stock Exchange, where Hyder has been listed since 2002, that it was  considering its position and would make an announcement in due course.

Announcing the offer Nippon Koei said that the merger would enable it to broaden its client base and geographic footprint. “We rarely make acquisitions but having studied Hyder carefully we are clear about how important and strategic this merger is for us,” said Noriaki Hirose, president of Nippon Koei.

“Both Nippon Koei and Hyder operate in the same part of the design and engineering  consulting value chain. In short our chairman (Yoshihiko Tsonoda) and I could not envisage a better business for us to merge with.”

In a statement the firm said that the board does not currently anticipate any restructuring of the operations of Hyder, any employee redundancies, the closure of any locations of Hyder’s places of business or any redeployment of Hyder’s fixed assets.  “Given the success of both organisations we intend to make minimal changes to the existing operating structures of either organisation and are excited about the prospect of capturing, cross selling and other revenue generating opportunities,” said Hirose.

Nippon Koei was founded in 1946 to rebuild Japan’s war torn infrastructure. It has had particular success in delivering Japanese financed projects in overseas emerging markets. It will seek to leverage Hyder’s engineering design centres in the Philippines and India to support work for existing clients and at the same time it said Hyder would benefit from development into proprietary technologies at its research and development centre in Japan.

Nippon Koei is a similar size to Hyder with revenues at March 31st 2013 of £421.4M, compared to Hyder’s £298.1M for the same period. The much larger ARCADIS meanwhile reported gross revenues of £2 billion in 2013.

  • Bid announcement here:
  • Nippon Koei latest financials here

10 Things to know about NIppon Koei

1. Nippon Koei was founded by Yutaka Kubota in 1946 focused on post war reconstruction of Japan.

2. It is listed on the Tokyo Stock Exchange with a market capitalisation of £261.7M (on 7 August 2014)

3. Turnover to March 31st 2013 was £421.4M (last full reported year)

4. Profits to March 31 2013 were £29.7M (last full reported year)

5. The firm’s first overseas project was a power station in Burma in 1953

6. President Noriaki Hirose will be the first ever consultant to become president of the Japanese Society for Civil Engineers in 2015.

7. The firm has worked on 100 hydropower schemes in 25 countries

8. It has planned and engineered over 70 airport projects in 30 countries

9. In December 2013 Showa Women’s University, Japan recognised the company as the second best service company in Japan for supporting women in flexible working

10. Nippon Koei specialist tunnelling subsidiary Nippon Civic Consulting Engineers is 50 years old this year.

If you would like to contact Bernadette Ballantyne about this, or any other story, please email bernadette.ballantyne@infrastructure-intelligence.com:2016-1.