黑洞社区

Arcadis鈥� planned 拢256m acquisition of UK engineer Hyder will benefit its existing UK-based business EC Harris by enabling it to offer a 鈥渇ull set of integrated services鈥�, particularly in the UK and Middle East, Arcadis chief executive Neil McArthur has said.

Arcadis revealed yesterday it has agreed a deal with the board of 拢297m-turnover, 4,500-strong Hyder, with the deal expected to close in the fourth quarter this year, subject to shareholder backing.

Arcadis will grow to become a 鈧�2.9bn-turnover (拢2.3bn), 26,500-strong business if the deal goes ahead.

Speaking after the announcement, McArthur told 黑洞社区 EC Harris would 鈥渂enefit greatly from the deal鈥�, particularly from being able to 鈥渃ombine its project management, cost management and business advisory services with Hyder鈥檚 design and engineering services鈥� in the UK and Middle East.

McArthur said: 鈥淭he deal will allow EC Harris to offer our clients a full suite of business capabilities, including design and engineering.鈥�

The deal will roughly double Arcadis鈥� businesses in the UK and Middle East, while enabling it to enter the Australian market for the first time.

Arcadis鈥� UK division, which trades as EC Harris, will expand to a 鈧�322m-turnover (拢255.5m), 3,800-strong business.

Arcadis鈥� Middle East business will jump to 鈧�179m (拢142m) turnover, while the firm will gain a 鈧�79m (拢63m) foothold in Australia.

McArthur said Arcadis has identified 鈥済rowth opportunities鈥� from utilising Hyder鈥檚 900-strong offshore engineering design facilities in the Philippines, India and Jordan.

The facilities, known as Design Excellence Centers (DECs), carry out schematic and detailed engineering design work for Hyder鈥檚 market-facing businesses elsewhere in the world.

McArthur said building on Hyder鈥檚 鈥渙ffshoring鈥� model would not result in job cuts, but may change the make-up of engineers鈥� work in client-facing markets, with engineers asked to do 鈥渕ore conceptual engineering design work鈥� in 鈥渋ntegrated client-focussed teams鈥�.

He said: 鈥淗yder has cracked the code of separating conceptual engineering design work, done in client markets, from schematic and detailed design work, which is offshored to countries with a lower cost base.鈥�

He said the DECs offered a 鈥渉igh quality service鈥� and were 鈥渄rawn from the best engineering schools in these countries鈥�.

Arcadis鈥� overall professional and sector mix will remain largely unchanged after the deal, although program, project and cost management services will reduce to make up 21% of the business, down from 24%, while design and engineering services will rise to 32%, up from 22%.

Arcadis said it expected to make 鈥渁nnual pre-tax synergies of around 拢15m鈥� from the deal, with these expected to be 鈥渇ully realised by the end of 2016鈥�.

Arcadis said the savings would be 鈥渟plit between revenue growth and cost synergies鈥�, with savings expected from use of DECs and reduction of real estate and overlapping corporate and support functions, with 鈥渓imited headcount reductions鈥� expected to 鈥渁mount to less than approximately 1% of the current Hyder workforce鈥�.

Arcadis expects to incur one-off integration costs of 拢7m.

Arcadis has agreed terms for a recommend cash offer of 6.50 per share for all of the shares in Hyder, representing a 40% premium on Hyder鈥檚 拢4.69 share price at close of business on Wednesday.

The 拢256m price tag for Hyder represents an 11.2 multiple of its earnings before interest, taxes, depreciation and amortisation (EBITDA).

A Hyder shareholder vote on the takeover is expected to be held in Septmeber.

Arcadis has already secured letters of intent backing the deal from shareholders holding 16% of Hyder鈥檚 shares and 3% of these are irrevocable undertakings.

Hyder was founded in 1823 and floated on the London Stock Exchange in 2002.