Contracting giant Balfour Beatty last week stunned the industry by agreeing to buy consultant Parsons Brinckerhoff (PB) for £380M - Balfour’s chief executive Ian Tyler spoke to NCE.
Former BAA capital projects director Andrew Wolstenholme will lead the takeover and drive business opportunities through the combined group. Wolstenholme joined Balfour Beatty Management as managing director in February.
PB will retain its own identity and operate independently.
“We want the brand, the people and the processes, and to bring those processes in.”
Ian Tyler, Balfour Beatty
Balfour Beatty chief executive Ian Tyler said Wolstenholme was its “make-it-happen man”. “He is the spark to do things in the long term. He is a very serious group management man.”
The takeover, known internally by its codename “Project Blackadder”, has been the subject of secret negotiations for six months. Tyler confirmed that the PB brand was the big attraction.
“We want the brand, the people and the processes, and to bring those processes in, to use them and develop them.
“PB is motivated in the success of the business. There is a real motivation, and we want to maintain that culture and make it better.
“The PB brand and the Balfour Beatty professional services brand will not compete − we will bring the two together. We thought it would be crazy to have two separate businesses doing essentially the same thing.”
A transformational deal
Tyler said the deal was “transformational”. “For us, the business we have been developing in professional services is starting to transform the way we look at the world. We are fundamentally a different business because of the way we integrate and manage,” he said, adding that the acquisition would accelerate this process.
“The PB management stays in place − we do not want to change this,” he said.
PB chief operating officer Stuart Glenn said the consultant agreed to the takeover because it wanted to grow.
“To remain competitive in the professional field, we need size. We needed to grow and diversify.”
Stuart Glenn, Parsons Brinckerhoff
“PB had a look at our business in terms of our strategic direction a couple of years ago. We found that [United States] competitors in transportation and infrastructure − the CH2M Hills, Aecoms and URSs of this world − have outstripped us in the last few years in size and growth.
“To remain competitive in the professional field, we need size. As an employee-owned organisation we could not meet that strategic direction. We needed to grow and diversify,” he said.
Tyler agreed: “It is a very good deal for Parsons Brinckerhoff − look at where they are coming from − they need a bigger balance sheet and that’s what we give them.”
The deal will also give Balfour Beatty a platform to expand in the United States.
The deal is expected to be complete by the end of October, when 75% of PB’s 4,500 shareholders are expected to approve the deal.