American firms eye Davis Langdon
Davis Langdon, the UK’s second largest QS which employs 5 000 people, is in takeover talks with two American firms.
Building reported that talks with Aecom, the £3.8bn turnover multidisciplinary group, have been ongoing since before Christmas, while engineering giant Jacobs also held recent talks about a deal.
Speculation that a takeover could be imminent was heightened after reports emerged that partners at Davis Langdon held an emergency meeting in London to vote on takeover proposals.
A source told Building: “Aecom and Jacobs are both vying for Davis Langdon and after this week’s vote, something could happen in the near future.”
Aecom is tipped as the leading contender, with its project management specialism seen as a better fit for a QS than Jacobs, which has a £7.1bn turnover and is noted for its engineering credentials.
Aecom, which employs 45 000 people, acquired QS Savant in May and has made it clear that it plans further expansion. It established its UK presence by acquiring design firm Faber Maunsell.
Rob Smith, senior partner at Davis Langdon, declined to comment on whether the firm was talking to the US companies. But he did say that he would only reach agreement with a firm that could help the company achieve its global growth plans. “Any decision we make will relate to our ambition to be the leading global consultant,” he said.
He denied reports that the company was under financial pressure to do a deal after debt in its European and Middle East business doubled to £32m in the year ending April 30th 2009. Stressing that there was no need to sell and that there was no debt in the £339m turnover global business, he said: “We are not being forced to do anything.”
He added: “We have conversations on and off throughout the year. There is a recognition of what the leading QS firms like us have to offer. Many of us have exposure to emerging markets, such as China, which forecasters say will overtake the US in growth.”
Francesca Raleigh, an analyst at corporate finance adviser Numis, told Building that American companies currently have much higher ratings compared to UK companies’ valuations, which are so low tha they present great opportunities.
Aecom and Jacobs declined to comment.