Engineer Arcadis To Buy EC Harris, Cuts 2011 Outlook

Dutch engineering firm Arcadis said it would acquire London-based buildings and infrastructure consultant EC Harris to strengthen its position in project management and expand its presence in the Middle East and Asia.

The company, which also cut its outlook for 2011 earnings on Monday, has been looking for opportunities away from the struggling Benelux market, looking to tap strong growth in Asia and South America.

"Although an acquisition in the UK was not on top of our expectations list, EC Harris adds decent size and an attractive position in the Middle East and Asia," SNS Securities analysts wrote in a note.

Arcadis, which competes with Dutch peer Grontmij and U.S. rival Tetra Tech , said it would issue 3 million shares to EC Harris partners and pay an undisclosed cash amount from existing credit facilities.

SNS Securities analysts estimated the acquisition price to be between 108 million and 144 million euros ($150 million to $200 million).

Arcadis shares were down 1.1 percent to 14.1 euros at 0830 GMT, underperforming Amsterdam's midcap index, which was up 1.3 percent.

Arcadis Chief Executive Harrie Noy said the deal would make his company a top-five firm globally in project management and would allow it to win new business higher up the construction value chain.