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Atlantic crossing

Halcrow has moved up a tier in the structures and maritime markets with two astute north American purchases. Jackie Whitelaw reports.

'Whether they know it or not, the directors of Halcrow when abroad have reputations as demon shoppers who could give Trinnie and Susannah a run for their money. And true to form a group of them returned from North America last weekend able to unveil some valuable acquisitions.

At the stroke of two pens the company has purchased internationally renowned Canadian structural engineer Yolles and leading US ports specialist HanPadron Associates (HPA). In basic numbers terms, the 180 Yolles staff - mainly based in Toronto and the UK - and 150 HPA personnel mean Halcrow total staff numbers now top 5,000.

And the firm's £234M turnover will be swelled by HPA's US$25M (£14M) turnover and Yolles' C$24M (£10.5M).

But the effect of Halcrow's £20M investment in North America is intended to be much more than the sum of the parts. The deals mean Halcrow starts 2005 with a beefed up property business that, thanks to Yolles, has an added expertise in tall buildings, an established reputation with blue chip architects and much stronger list of commercial clients. The HPA acquisition has allowed Halcrow to create a whole new maritime business group which combines UK and US expertise to form what it believes to be the largest ports consultancy in the world.

Perhaps most significant of all is that HPA comes with established US offices - in New York, California and Florida - notoriously difficult for foreign companies to set up from scratch. These can be used to help expand Halcrow's business in the US including that of its new Yolles purchase.

By 2007 Halcrow hopes to be turning over £34M in North America and employing 430 staff there, significantly bolstering the amount of work the group does outside the UK and helping rebuild global fortunes that were hit hard by the Asian economic collapse at the end of the 1990s.

'We saw in 2002 that the US and Canada were a big void on the Halcrow map, ' says group board director David Kerr. 'We'd had a small presence there for a few years but we needed to extend. We couldn't afford to ignore the world's largest economy any longer.' 'We'd started out a few years earlier trying to burrow our way into the market, ' says Halcrow USA president Les Buck. 'And initially we followed our noses into ports and maritime with some success, particularly the contract to help the Port of New York & New Jersey increase its capacity (NCE 29 May 2003). But issues of registration, regulation and a strong buy-local policy led us to the conclusion that we had to become local and seek acquisitions.' The company started to look for partners. It was introduced to Yolles by a mutual acquaintance and the whole dating dance began. Over a series of intimate dinners Yolles president Andy Bergmann and partner Hugo Blasutta discovered there was a lot they liked about Kerr, Buck and Halcrow.

'We'd being going 52 years, we were doing well, but when we looked ahead we knew the climate was changing, ' Bergmann says. The company was highly skilled but was finding it was not big enough to win the big commissions. 'We lost a stadium in Riga, Latvia, because we didn't have a base there. Halcrow does and if we'd been together then, that would have made the difference, ' Bergmann says ruefully. 'Anyway we were finding new ways to lose work. So we set about looking for a partner and Halcrow ticked all the boxes.' Halcrow, he says, worked on exciting structures, and aspired to work on more, both big and small, but there was room for Yolles to come in and make a difference. 'We are joining at a great time, ' says Bergman. 'We wouldn't have wanted to be five years later when they'd have run ahead without us.' HPA by its own admission was a bit more passive finding its mate. Founding partner Ed Han had already retired and Dennis Padron aims to follow in a couple of years. 'The other partners decided we needed a transfer strategy and generally thought acquisition would be the way to go, ' says HPA partner Jonathan Goldstick.

HPA was one of the fi rms Buck went to talk to about US work: 'We had no idea they were looking to merge, we just hoped we could do some mutual back scratching.' A separate round of candlelit dining followed with both deals being signed in December.

Halcrow's US staff have moved into the HPA offices, which has created a good buzz about the merger - helped by the news that Dennis Padron's masterplan for a new £7.5bn port development at Jebel Ali in Dubai has been accepted and he has been asked to get on with detailed design.

In Canada the Yolles staff are no less optimistic about the future. They are working on projects with Sir Norman Foster and Frank Gehry and expect their experience of tall buildings to attract new UK and worldwide business to Halcrow.

The romance looks promising.

'But we haven't really been to bed yet, ' says Bergmann. 'I'll let you know when we've had the cigarette.''

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