黑洞社区

鈥淲e were all shocked when we were called into a room and told that we were being bought. We were gobsmacked it hadn鈥檛 leaked, bowled over. Very few people must have known.鈥�

One senior industry figure is recalling the time several years ago he found out the consulting business he was working at had just been snapped up by Aecom.

For many at T&T right now, that feeling will be familiar. Only a handful of people at the very top would have known, all sworn to secrecy and, given that the discussions with CBRE had been going on for more than six months, dreading it leaking out, alerting rivals, causing unease and leading to the whole thing being called off.

鈥淲hen Aecom bought Davis Langdon,鈥� the source adds, 鈥淚 had a lot at DL ring me up to find out what it was like. They read the stuff in the press, the talk about 鈥榮ynergy and fit鈥� but they wanted to know what it was really like.鈥�

It is easy to imagine similar conversations going on among the 7,000 staff at T&T right now.

罢耻别蝉诲补测鈥檚 announcement that the firm is selling a 60% stake to US giant CBRE, a business with 100,000 staff and a $23.8bn (拢17.2bn) turnover last year, is big news, as big as Aecom buying Davis Langdon, although, for shock value at least, still not quite as seismic as O鈥橰ourke buying Laing for 拢1 two decades ago.

On the same day, a few hours after the T&T deal broke, M&E consultant Hoare Lea, which has been in business for nearly 160 years, more than twice as long as T&T, announced it had been bought by California-based Tetra Tech, the firm which snapped up WYG in 2019.

Two years ago, Hurley Palmer Flatt became another UK business to say it had been bought by a US rival, the Omaha-based engineer HDR.

What is it, then, that American firms like so much about UK consultants?

鈥淭hey like the heritage and the fact they鈥檙e mostly very well run,鈥� says the boss of one. 鈥淲e have good moral ethics,鈥� another adds. 鈥淲e play with the straightest of bats and that鈥檚 respected worldwide. If a US firm can鈥檛 penetrate a particular region, a UK brand helps them unlock it.鈥�

One London QS says: 鈥淭he way we run projects is, dare I say it, superior to that in the US where the PM and QS culture is not quite as big over there. CBRE鈥檚 deal with T&T will give them access to other markets such as Asia, Africa and the Middle East via the UK.鈥�

What will change?

But while the talk in the past 48 hours has been about what a good deal it has been for T&T, others are now bringing up more difficult questions.

Given CBRE is shelling out 拢960m for its stake, the simple maths says that T&T鈥檚 106 partners will each walk away with an average of 拢9m once the deal is wrapped up later this year. Some will get less, of course, but others will get considerably more.

鈥淎 deal like this creates two groups of people,鈥� one boss says. 鈥淭hose who have done very well out of it and those who haven鈥檛. How you manage that and foster that 鈥榳e鈥檙e all in this together鈥� ethos will be crucial to making it work. But there鈥檚 no doubt some of the amounts people will be getting as a result shifts the culture and the dynamic at T&T.鈥�

One large rival admits: 鈥淚f someone comes along and drops 拢9m in your lap, your outlook on life must change.鈥�

Another is more direct: 鈥淚t鈥檚 a very good payout for the senior guys that are knocking on a bit. I would imagine they鈥檒l hang around for a bit and then leave. Everyone is selling just before retirement.鈥�

鈥淭he challenge is keeping the next level happy,鈥� one partner at a London firm says. 鈥淚f they鈥檙e on a partnership programme and this [deal] means that they鈥檙e not anymore, they won鈥檛 be happy.鈥�

Several firms came out of Aecom, notably Alinea and Core 5, but not many are expecting start-ups from T&T to emerge overnight.

I think it鈥檒l be about a year before we start to see people leaving and setting up on their own

Anonymous company boss

By keeping 40% of the business itself, the consensus is that T&T has put in place a strategy to prevent an exodus of key staff. 鈥淚t will keep a lot in the business 鈥� for now,鈥� reckons one. 鈥淭he 40% thing is about preventing people from walking away.鈥�

But many do expect some to eventually make a break and set up on their own. 鈥淚t鈥檚 not for everyone being part of 100,000-plus business,鈥� one says, adding dryly: 鈥淐BRE like their 鈥榞lobal workspace solutions鈥� handles.鈥�

One managing partner told 黑洞社区 that the most difficult part of doing a deal like this is keeping hold of people. 鈥淭here鈥檒l be a strategic review and all through that people will sit tight. I think it鈥檒l be about a year before we start to see people leaving and setting up on their own.鈥�

Identity and independence

Announcing the news, T&T chief executive and chairman Vince Clancy said the name would stay. But others don鈥檛 think so. 鈥淚t鈥檒l go,鈥� reckons one. 鈥淭hey鈥檒l keep it for a couple of years, wait for the moaning about the name to die down and ditch it when it鈥檚 a less emotive issue. People will turn around and say: 鈥榃ell it was always going to happen, wasn鈥檛 it?鈥欌��

 

Another chief executive agrees. 鈥淭&T is a 7,000-strong business that will now be part of a 107,000-strong business. Vince is a great chap. I just hope they don鈥檛 get absorbed into a very large firm and that they can maintain their independence like he says they can. But nobody is going to buy 60% of a business and not change it.鈥�

CBRE has been listed on the New York stock exchange since 2004 and the chief adds: 鈥淲ill it [T&T] now become a business run by accountants to deliver outcomes for shareholders? You do worry.鈥�

I just hope they don鈥檛 get absorbed into a very large firm and that they can maintain their independence

Anonymous chief executive

For clients, the news is mixed. 鈥淭&T is heavily involved in infrastructure and I don鈥檛 think those clients will be spooked so much,鈥� says one. 鈥淭hose jobs are so big I don鈥檛 think it really bothers them who owns the business.鈥�

But others aren鈥檛 so sure. 鈥淭he London developer clients won鈥檛 like it. They like that individual service that focuses on them and the home market. These deals [with overseas firms] smack of sending business and resources abroad.鈥�

One major client 黑洞社区 spoke to was left feeling nostalgic. 鈥淚t does make a difference to the developers [who owns it]. Life moves on but it鈥檚 a shame.鈥�

T&T鈥檚 UK rivals think the news is good for them. 鈥淎t worst its neutral for us, if not positive,鈥� says one. 鈥淚t was well-known T&T was looking at overseas areas, notably the Americas so this will accelerate that.鈥�

Elsewhere, others are using the news to pause for thought.

For one contractor, the T&T deal holds up a mirror to his part of the industry. 鈥淎s contractors we often criticise other parts of the industry but we have to reflect on who is generating income and earnings and economically stable businesses.鈥�

Take the eventual sale of Laing as an example of what he means. When the family put its construction business on the block, the belief was that, as a blue riband brand, it would fetch 拢100m and attract an overseas raider looking to break into the UK market at a stroke. In the end, none of that happened.

There was no overseas firm waiting in the wings to rescue Carillion either, the contractor which had bought up Mowlem and Alfred McAlpine and which, at one stage, was mustering a bid for Balfour Beatty.

鈥淭he money is being made far more on that side of the industry than our side,鈥� the contractor adds. 鈥淚鈥檓 not being negative, I鈥檓 just looking forward to getting it right a lot more.鈥�