CH2M Hill’s acquisition of Halcrow follows a two year long pursuit. Jacque Rast, the woman who has finally made it happen, tells Mark Hansford why the US giant was so keen.
Halcrow is a household name in UK construction, well known to all as a UK-based civil engineering consultant, specialising in transport, environmental and other infrastructure projects.
Founded in 1868, the medium sized firm has over 6,000 employees and is known for its design work on signature projects such as High Speed 1 in the UK, the Chongzun Expressway in China and Yas Island in the United Arab Emirates. It reported revenues of £465M in 2010.
It is being taken over by American prorgamme management specialist CH2M Hill. The US firm is, by contrast, a global engineering giant, specialising in programme and project management.
It has around 23,000 employees and is known for its programme management on signature projects like Crossrail, the London 2012 Olympic Park, the Panama Canal expansion programme, Masdar City in the United Arab Emirates, and Singapore’s Deep Tunnel Wastewater Programme. It earned $6.3bn (£4bn) in revenue last year.
But both firms are employee owned, they have similar cultures and ethics, and both place sustainable development at their heart. So for Jacque Rast, the CH2M Hill main board director who will be running Halcrow, it’s a perfect marriage.
“We’ve worked alongside Halcrow for many years. In the last decade we have already teamed up with them, we’ve already formed partnerships, and this deal makes us both stronger.
“This literally is a model we couldn’t have designed better.”
Jacque Rast, CH2M Hill
“We are very complimentary in terms of geography and skill sets. This literally is a model we couldn’t have designed better.
“Now we have world class design, consultancy, programme and project management. It’s a game changer.
“It is a great day for us and for Halcrow, but this is not a great day for our competitors,” she says.
Rast says the decision to move for Halcrow was taken as long ago as 2008, when the firm set out a strategy of global expansion through acquisition.
It moved on Scott Wilson last year, but only because Halcrow was not keen to sell at that time.
“Halcrow was always our first choice,” she says, “but at that point it was not ready for sale.
“But Halcrow was top of our wish list because it has a stronger brand and a stronger reach,” she says.
That strength of brand and reach may mean the name Halcrow does not disappear for some time yet.
“We will merge Halcrow into our UK operation, but we will take some time to do that,” she says.
CH2M Hill has set up a programme management delivery centre in London to serve the UK and Middle East.
“We don’t have anything like the presence of Halcrow in the UK and that’s also the case in many places around the world.”
Halcrow’s operations in Europe, the Middle East, Asia Pacific and South America were of great appeal to CH2M Hill, with the acquisition set to more than double its international presence to almost 30,000 employees globally including over 11,000 outside of the US.
“We don’t know the answer to the name,” admits Rast. “Halcrow has a strong brand and there are parts of the world where it is stronger than CH2M Hill’s. So we will have a joint branding team working on this for several months.”
Rast cites CH2M Hill’s 2003 acquisition of US engineer Lockwood Green which still trades under its own name in some areas.
But she is clear that Halcrow will become an integral part of CH2M Hill, capitalising on its strength in transport, water and environment.
CH2M Hill is also keen to capitalise on Halcrow’s presence in growth markets.
“If you take a look at what sectors are ripe for expansion then you see continued growth in the Middle East, India, South East Asia, Australasia and South America,” she says. “And some would say North America isn’t a bad market either, and Halcrow brings an additional strength here too.”
Rast is coy about which markets and projects will be the first targets for the combined Halcrow/CH2M Hill operation, but she admits Brazil is on the radar.
“Any major infrastructure programme in the markets we serve is fair game for us,” she says. “But Brazil is really hot with the Olympics, the FIFA World Cup, infrastructure programmes and environmental clean-ups.
“You can expect us to show up there.”
Rast’s energy and enthusiasm for the task ahead is plain to see. Currently living close to CH2M Hill HQ in Denver, Colorado, she on the hunt for London property and preparing herself for another stint of London life.
She last spent time in London spearheading CH2M Hill’s successful pursuit of the delivery partner contract for London 2012’s Olympic Park (see box). Then she lived in the capital for two years, she is not planning on spending too much time here.
“I expect I will be a world traveller for a while,” she says. “There are a lot of offices worldwide to go visit.”
Rast’s jet-setting gain is current Halcrow chief executive Peter Gammie’s loss. Gammie is to step down after the deal goes through.
But she’s hardly kicking Gammie out the door. He was due to retire at the end of the year and he has agreed to stay on as a consultant to help with the transition.
“Hopefully we can get him down from a 15 hour day to an eight hour one,” she says.
Rast has a 30 year relationship with civil engineering, beginning in the late 1970s as a civil engineering student at Penn State University.
After graduating in 1983 she plunged straight into working on probably the biggest environmental clean-up ever undertaken – the United States Environmental Protection Agency’s (EPA’s) £9bn-plus programme to decontaminate thousands of abandoned hazardous waste dump sites across the country.
The EPA’s so-called “Superfund” meant new clients, different technologies, diverse professional capabilities, unknown risks, and challenges beyond anything previously imagined. As technically complex as Britain’s current nuclear decommissioning challenge, the job was also laced with political pitfalls and stakeholders to negotiate - and was classic programme management material.
She joined CH2M Hill midway through this programme in 1988 and from there she worked on major programmes in many other sectors, including defence, roads and rail before setting up her own management consultancy in 1997, advising infrastructure owners on how to structure big programmes.
She sold that business to Earth Tech in 2001, before rejoining CH2M Hill in 2005 to secure the firm’s role on London 2012.
She lived in London for two years while the vision and strategy was developed but is now based again in Denver - although her oversight responsibilities for projects such as the Panama Canal expansion, Masdar, Mumbai Airport and London Tideway Tunnels keeps her in the air and living out of a suitcase for weeks at a time.
Halcrow’s new owners eye global markets: Jacque Rast first interview