The architecture firm Aukett Swanke has completed its second acquisition in the UAE in eight months after buying Shankland Cox for Dh16 million.
The company is paying an upfront sum of Dh6m in cash for Shankland Cox, with the remaining Dh10m to be handed over as projects are completed and bills settled.
The deal not only provides a considerable boost to Aukett Swanke’s scale in this country but also adds an consultancy engineering capability.
The company had 13 staff in the UAE before its buyout of John R Harris in June, but this latest deal brings that number to 146. “We took the view that to be there long term we would have to be a lot bigger,” said Nicholas Thompson, the chief executive of Aukett Swanke Group.
He said that organic growth would have been much more difficult to achieve, because “if you haven’t got a large team it would be very difficult to support a tender for larger projects”.
Shankland Cox was set up in the UK in 1962 and has been operating in the UAE since 1986.
It has delivered a number of notable projects, including the Dubai campus of Sheikh Zayed University and Etisalat’s Dubai headquarters, close to the city’s World Trade Centre.
In the year to March 31, 2015, it made a pre-tax profit of £34,000 on revenue of £4.6m and had net assets of £3m.
Aukett Swanke, last month, posted an 8 per cent rise in revenue for the year to September 30, 2015, of £18.7m and a 33 per cent gain in pre-tax profit to £1.9m.
Mr Thompson said part of the deal’s appeal was that Shankland Cox’s staff were spread across the UAE, with offices in Abu Dhabi, Al Ain, Dubai and Ras Al Khaimah. “Geographically, it’s a much better balance for us and helps considerably with the offer we have in the marketplace.”
He said the addition of an engineering consultancy capability “allows us to be the lead consultant on most occasions when tendering and bidding for contracts”.
He was not concerned about the oil price. “My view is that in the long term, the UAE is a safe market. It’s surrounded by difficult situations but I look at it as politically and financially stable. It has a lot of factors encouraging for a business to grow.”
Speaking at the World Architecture Festival’s inaugural Dubai event on Wednesday, Michael Fowler, the Middle East managing director of a rival UK architecture firn, Aedas, said of the declining oil price: “We’ve seen changes in the market, but it’s certainly not a dramatic, off-the-cliff kind of experience.
“There’s been some tenders cancelled. In Saudi Arabia, there are some projects that have been put on hold and some that are being phased in a slower way, but overall I’m not impressed with the threat of oil prices.
“I can remember when everyone was bent out of shape when oil prices were going up. I think high and low oil prices both create opportunities,” he said.
“If anything, especially here in Dubai, the emirate is less dependent on oil and you could argue that lower oil prices will help the tourism industry that is feeding a lot of the growth and success of Dubai.”
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