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IN a move touted as transformational, Surbana Jurong Pte Ltd is acquiring Australian-based consultancy firm SMEC Holdings Ltd (SMEC) for S$400 million.
This immediately scales up the Temasek unit into the largest development consultancy group based in the Asia-Pacific region.
The combined entity will have an estimated annual revenue of about S$1.1 billion, more than double Surbana Jurong's annual consultancy fees of S$500 million.
Surbana Jurong's headcount will also double from over 4,000 currently to nearly 10,000 employees and its number of offices will increase from 26 currently to over 95 offices across 40 countries.
Surbana Jurong CEO Wong Heang Fine cited complementary strengths in the two companies, highlighting SMEC's experience and strength in major infrastructure projects in the urban transport, energy and water sectors as well as Surbana Jurong's track record and expertise in urban planning, township and industrial development.
By coming together, they will offer unique complete value chain services in urban and infrastructure solutions to clients globally, he added.
SMEC CEO and managing director Andy Goodwin noted that the combined entity will not only benefit clients, but also deliver enhanced growth opportunities for employees and partners.
"We are confident that the synergies between SMEC's progressive culture and Surbana Jurong's established company values will result in a mutually beneficial partnership over the long term," he noted.
SMEC is ranked 48 among the top 225 international design firms this year, according to Engineering News-Record (ENR) magazine.
Sharing a similar pedigree as Surbana, SMEC was formed in 1949 to undertake a major integrated water and hydroelectric power project in New South Wales, Australia. The project was considered an engineering feat and recognised by the American Society of Civil Engineers as one of the seven civil engineering wonders of the modern world.
Today, SMEC employs almost 6,000 people across more than 75 offices in Asia, Africa, Australasia and North and South America.
Surbana Jurong chairman Liew Mun Leong pointed out that Singapore and Australia have undertaken many major showcase development projects through Surbana Jurong and SMEC respectively, and it is timely for both to share their expertise and capture the huge market opportunities.
According to a report by PwC, infrastructure spending is expected to grow from US$4 trillion per year in 2012 to more than US$9 trillion per year in 2025 of which 60 per cent will be in the Asia-Pacific market.
Besides financing and funding, wide and deep technical expertise in urbanisation and infrastructure development will be needed, Mr Liew added.