Smooth takeover boosts strengths
Even with the most complementary companies, acquisition integration presents its own set of problems. By ensuring all parties were involved in the process, one company avoided the pitfalls and is now seeing the benefits of consolidation.Black & Veatch Water Europe is not afraid to face challenges. This attitude has shown through as the group goes through the process of integrating MJ Gleeson's water business into its existing activities.
The acquisition fulfilled Black & Veatch's desire to become a single-source provider of engineering design, process engineering and construction for UK water clients. The company's aim now is to be the leading project deliverer in AMP5.
The company bought Gleeson's water business in October 2006. It paid £36M, but gained about £200M worth of extra business as a result.
The group expects its revenue this year is to be £400M across the whole business. Three quarters of that will be from the UK water business.
The acquisition also more than doubled the size of Black & Veatch's existing UK activities in one fell swoop, and added 900 employees to its UK workforce of around 900. Globally, Black & Veatch has about 8,500 staff.
At the time of the acquisition, Black & Veatch said that the two organisations were complementary and well matched. At the time, the company said: "Our cultures and our business philosophy are a strong fit, and our services are complementary.
"As a result, we can now offer total project delivery - from concept through commissioning - to our water, environment and energy clients.
"We've found a remarkably similar set of values and cultures that focus on providing a challenging, rewarding workplace for professionals and a high level of service to clients."
Black & Veatch appears to be integrating the acquired business smoothly into its existing activities.
But then integrating acquisitions is becoming second nature to the company; it bought Binnie & Partners and Paterson Candy in the mid-1990s and merged them into the main business about four years ago.
Black & Veatch's first step was to appoint Gleeson's former water business manager, Tony Collins, as managing director of its expanded UK water business.
"The time's flown," says Collins. "We hit the ground running, and we're still running. The global nature of Black & Veatch has been a shock."
But he says the relationship between the two organisations has worked well, adding: "We're stronger together."
He is adamant that both operations complement each other, with Black & Veatch having brought process engineering to the table while the former Gleeson division was geared more towards civil engineering. "If we'd [the Gleeson business] had a large design side, things might have been different. But we fitted well from day one."
And he says: "With about 1,800 professionals nationwide, no big issues occurred.
These processes were created by taking best practice from both operations."
Communication has been key, with working groups created to ensure a smooth transition over to the new working practices. Collins explains: "We have worked hard from day one to not have a them and us situation."
Integrated health and safety procedures were the first to be rolled out, followed by the IT systems and project delivery. Black & Veatch ensured that staff were involved in the roll-outs. Collins says the integrated health and safety procedures marked "the first tangible result of the one Black & Veatch system we will all be using".
As such, he says, it was important the new procedure was seen in a positive light.
"We worked hard from day one to ensure there wasn't a them and us situation," explains Collins.
These new procedures were allowed to bed in before Black & Veatch started introducing the next new system. "We recognised the danger of roll-out fatigue," says Collins. The whole process of introducing the various new system procedures was project managed to avoid a "massive wave" of revised processes.
Collins says it is difficult to place a figure on cost savings as a result of introducing best practice. "The various systems that we had were all instrumental, and they worked. Best practice has been taken from both [organisations]."
Engineering is all about solving problems, he says, and Black & Veatch has technical knowledge, experience and expertise. "We can lend that to bids, and for project delivery challenges as well. We've got all the skills to do that. We can do construction, we can work with other partners because we have a lot more variety now, and that is all in-house.
"We have to prove it now by going out and winning business. We want to be the best," says Collins.