ANALYSIS: The international real estate company has added to its engineering capabilities with its recent WA acquisition.
Best known in Western Australia for its real estate operations, Colliers’ recent acquisition of Subiaco-based engineering consultancy Pritchard Francis may have surprised some.
Announced in early September, it’s the first acquisition in WA by the engineering arm of the US-based international commercial property company.
The merger will rebrand Pritchard Francis, which operates in WA and Northern Territory, to Colliers Engineering and Design.
Pritchard Francis chief executive Arthur Psaltis said some people were caught off-guard by the move, but in a positive way.
“People have been quite interested and inquisitive about the announcement,” Mr Psaltis told Business News.
“Rather than saying, ‘It’s just another firm buying another firm’, they’ve recognised there’s something different about this.
“It’s new to market, and because of that they’re inquisitive about the joining of the two entities.”
Talks over the acquisition had been ongoing for 12 months, Mr Psaltis said.
The Pritchard Francis transaction was Colliers’ third in Australia in recent years.
The company acquired Peakurban, an independent engineering company with five offices across the country, in August 2022.
Colliers then bought NSW engineering, design and survey firm Craig & Rhodes in May 2023.
Last June, Colliers took over Canadian engineering, environmental, and inspection services firm Englobe Corporation, in what was the US company’s firm move into the Canadian market.
WA moves
Pritchard Francis was established in 1977 and has a workforce of 125.
The engineering consultancy has offices in Perth and Albany and has expanded to Brisbane and Darwin.
Colliers Engineering managing director Brent Thomas said his company had a strategy to diversify its business overall and become one the country’s premier engineering consultancies.
“Colliers seeks to be known as a professional services and investment management company now,” he said.
“Pritchard [Francis] was attractive for us because it filled a gap in our overall geographical strategy.
“We’re able to expand into the west coast, but it also helped us achieve expansion into different market sectors, because Pritchard Francis is multi-sector, mining, defence, structural engineering, land development, property and transport, civil infrastructure and renewables.”
Worldwide, Mr Thomas said, about 5,800 employees were employed in Colliers’ engineering and design entity.
“There are about 2,800 or so in Canada, there was a recent acquisition with Englobe, and there are about 3,000 in the US,” he said.
“We [have] 370 people now in Australia. By Christmas, we expect or anticipate 500 people in the engineering and design space.”
Colliers WA head Richard Cash said the state had the nation’s strongest performing economy.
“There are a lot of synergies with what we’re doing in the commercial real estate sector [and] with what Pritchard Francis has been doing in the engineering part of the sector,” Mr Cash told Business News.
“If you look at the percentage of mining projects, infrastructure projects and private developer commitments in WA, it’s just a great time to invest more heavily into WA for Colliers and Pritchard Francis.
“It increases our role as a trusted adviser to our clients, because we’ve got experts in so many categories that can help on every project now.”
Colliers opened its WA office in January 2022, starting with two valuation experts. The Pritchard Francis addition takes that total to 150 people.
Perth Airport Estate is one of the projects Colliers and Pritchard Francis are working on.
While the terms of the Pritchard Francis transaction have not been disclosed, Colliers Engineering has invested more than $US4 billion in acquisitions during the past 19 years.
All of the acquired entities have, or will be, rebranded as Colliers Engineering.
Colliers and Pritchard Francis have previously collaborated on major developments in the state, including Montario Quarter, Perth Airport Estate, Metronet station precincts, and Fitzroy Crossing housing project.
“We’ve been really successful in WA, and we’ve always had ambitions to grow the organisation at the right time with the right partner. Until now, we just haven’t found the right partner,” Mr Psaltis said.
“When we got approached by Colliers, we recognised there was something different about their model, primarily, but also we quickly recognised there was strong alignment in our approach to the way we go about working with clients.
“We’re confident clients will see us for what we do and our people more than what our name has been in the past.”
The acquisition of local engineering firms is not unprecedented in the WA business landscape, but it has not always played out well.
Perth-based VDM Group set its sights on expanding its engineering consultancy practices, having acquired Van Der Meer Consulting, Burchill Partners, and Belleng in 2006.
The company owned WA construction companies Keytown Constructions, a commercial, industrial and residential builder, and civil and mechanical engineering services contractor Civmec.
By 2013, VDM Group was struggling, having cut jobs and going through a restructuring.
VDM has refocused its operations on procurement and mining in the years since, having failed to effectively integrate all of its acquired entities.
Colliers and Pritchard Francis are optimistic about their agreement, with Mr Psaltis saying the team had done a lot of work to prepare for the announcement, internally and externally.
“An enormous amount of work went into it, and we felt it was critical and important that we got that right, particularly because it’s a little bit off centre … it’s not just an engineering firm joining another engineering firm that’s well known in the first market,” he said.
“We’re in our second week of rolling all of that out.
“Initially we spent an enormous amount of time just talking internally to our people, and then once we had implemented that we started to look externally to clients.
“We’ll co-brand in a little while, in a matter of weeks, I imagine … so there’ll be a co-branding period. But that will last a relatively short period of time.
“We’ve just started transitioning people over to Queensland as well who will now join the Colliers group.
“There’s confusion sometimes when brand permutation is skewed between the two entities and people wonder how that’s going to go. We haven’t seen any of that.”
Mr Psaltis said the brands’ reputations had put people’s minds at ease.
Partnership model
The leadership team from the takeover targets are significant shareholders in Colliers Engineering, as part of the company’s partnership model.
“The unique partnership model and the decentralised decision making is a key competitive advantage for us when we’re looking for partner firms, because thirty per cent to thirty-five per cent of the business is actually owned by the employee shareholders,” Mr Thomas told Business News.
“Nothing changes in terms of clients, service, clients’ access to people. Local decisions are still made.
“The same people work with clients every day. It’s just the name changes. That’s basically it.
A render of the Morley Metronet precinct, one of the projects Colliers and Pritchard Francis worked on.
“That’s what’s so attractive about the model ... it’s not orders or instructions being barked down from the top.
“It’s actually local ownership, empowerment and accountability, and without any change to the people.”
That’s one reason cited by Mr Psaltis as a driver for Pritchard Francis in taking up the Colliers offer.
“Firstly, and foremost, the framework of how the entity is structured was really attractive to us,” Mr Psaltis said.
“Our professionals have ownership in the entity, and they did previously, and it was very important for us that they remained and retained their ownership in the entity.
“I don’t think professional service organisations work out well unless that’s the case. It certainly works a lot better when that is the case.”
Mr Thomas said the focus on the engineering arm of business enabled Colliers to be involved with the project throughout its life cycle.
“It allows a fully integrated solution because you’ve got valuation and advisory, you’ve got investment services, you’ve got capital transactions,” he said.
“Now, as a business, Colliers can actually expand and provide greater value to clients by being involved in all phases of the project life cycle, from valuation, selling sites, leasing sites, designing them, engineering them, planning them. So, it’s a full turnkey.”
Similarly, Mr Psaltis said the merger would allow the business to add value at each stage of a project.
“Everybody [usually] just sticks to their own remit and looks after their own scope and responsibilities without a lot of consideration to the next person or the previous person,” he said.
“Whereas once there’s an integrated approach, there’s a crossover.
“You’re closing the gap between each service line and potentially being able to add value through knowledge and understanding.”
