- Corporate Overview
- Our Vision & Values
- Our Projects
- Joint Ventures
- How we operate
From Perth engineering to national construction company in the 1990s, UGL originated as a small engineering business, in Western Australia in the late 1960s, while tracing its official founding to 1970. This company, which came under the control of a group of Italian-Australian businessmen, focused almost exclusively on serving the Perth and Western Australian engineering markets for much of the first phase of its history. The mining industry represented the company's primary area of operations. The company became known as United Construction Group Limited in 1988, and in 1994 listed its shares on the Australian Securities Exchange (ASX).
United Construction struggled somewhat following its public offering, following the loss of a major maintenance contract. As a result, the group failed to meet its initial profit forecasts, forcing the group to complete a secondary offering, selling 7.5 per cent of its shares to a group of institutional investors in the United Kingdom and raising nearly A$5 million in 1996. The company nonetheless remained profitable, raising its net earnings from A$1.4 million on revenue of A$174 million in 1995 to A$4.1 million on revenue of A$182 million in 1996.
The company’s chairman at the time, Ivan Deveson, whose career included roles with Nissan, General Motors and the chairmanship of Seven Network, sought to transform the regional company into a national one. To this end, he brought in Dennis O’Neill as the company’s Managing Director and CEO in 1995. O’Neill had previously served as CEO of Brisbane-based Evans Deakins Industries Ltd. The new CEO took up the mandate of expanding the group’s geographic base, promising to add operations on Australia’s east coast.
O’Neill made good on his promise in 1996, when he reached a partnership agreement with Monadelphous Minerals & Energy to build a processing plant for BHP Minerals Pty in Cannington, Queensland. United Construction and Monadelphous had previously worked together on another project for BHP, constructing the world’s largest sand mining dredge in Beenup. United reported other good news in 1996, securing a series of contracts, including an A$80 million maintenance contract with the Water Authority of Western Australia and a contract to build a direct-reduction iron project for BHP at Port Hedland.
A change in leadership
In order to regain United Group’s momentum, Mr Ivan Deveson AO brought in a new Managing Director and CEO, Richard A. Leupen, a successful engineer and entrepreneur. Leupen became instrumental in transforming United from a relatively small-scale Australian company to a world-leading engineering services group. As Deveson told ‘The Australian’, speaking of his decision to hire Leupen: “In my long and diversified career, I put that down as the best decision that I was involved in.”
Leupen set out to reduce United’s continued reliance on the highly cyclical construction and engineering sectors by reinventing the company as a diversified services company with a focus on long-term contracts with governments and blue-chip corporates. To this end, the company carried out a restructuring and created three core businesses: United Goninan, for its railway operations; United Gooder for its small but growing New Zealand-based engineering, construction, industrial maintenance and facilities management businesses; and United KG, formed from the merger of United Construction, Kilpatrick Green and Total Asset Management Services. Following that merger, United KG became the leading engineering, construction and maintenance company in Australia.
At the same time, United began an effort to expand beyond the Australian and New Zealand markets. United Goninan expanded into the Hong Kong, Thai and US markets, while United KG added operations in Thailand. Through United Gooder, the company extended into Fiji.
Acquiring scale from 1997
O’Neill also launched United on a drive to reinvent itself as a diversified engineering services company. In September 1997, the company secured a A$45 million contract to build processing modules for an FPSO (floating production, storage and offloading) offshore platform in the Timor Sea Laminaria and Corallina oil fields. In keeping with its wider ambitions, the company changed its name to United Group Ltd. By the end of its June 1998 fiscal year, the company’s sales had grown to A$323 million.
Acquisitions became an important element of United’s transformation strategy. The company expanded into the infrastructure services market, a move consolidated through the acquisition of Kilpatrick Green in 1998. Kilpatrick Green, based in Sydney, brought United its expertise in electrical and mechanical construction.
With growth at its infrastructure division underway, United sought new areas of expansion. In 1999, the company launched its Rail division with the acquisition of Goninan Ltd., a company founded in 1899 which had grown to become the leading producer of railway rolling stock in Australia. Goninan became a part of the Howard Smith Company in 1917, and remained so until it joined the United Group.
United’s acquisitions helped propel the company’s sales growth, raising revenues to A$498 million in 1999 and to A$754 million in 2000. United, which now boasted more than 3,000 employees, struggled to maintain its momentum with revenue and earnings declining to A$677 million and A$2 million, respectively, in 2001. The company’s share price also languished at this time, giving the group a market capitalisation of just A$95 million.
Acquisition drive from 2002
With this restructuring completed, United complemented its organic growth with a renewed focus on acquisitions. The company launched a series of acquisitions, completing a total of 18 purchases over the next five years.
The first of these acquisitions came in August 2002, when United paid A$92 million to acquire Melbourne-based KFPW, a diversified engineering, construction and facilities management company. KFPW had been created in 1996 when Knight Frank and PricewaterhouseCoopers combined their Australian businesses. KFPW grew in 1997, buying Australian Property Group and by the year 2000 had become the leading property services group in Australia, managing some 25,000 properties over a total of seven million square meters of real estate. KFPW became United KFPW, and absorbed Kilpatrick Green’s facilities management operations in 2004.
United’s next big acquisition came in August 2004, when the company agreed to pay A$15 million for Thames Water Projects, part of UK-based Thames Water, which operated in Australia, Malaysia and Singapore. The purchase not only expanded United’s base into Southeast Asia, it also gave the company access to Thames’ water and wastewater infrastructure expertise. As part of the Thames Water purchase, United also acquired a water treatment plant in Maffra, Victoria.
Meanwhile, the group’s Rail division continued its own growth beyond Australia, notably into the Chinese market. In November 2004, United Goninan secured a US$23.5 million contract with GE Transportation to supply rail trains and platforms for China’s Railroad Ministry. United Goninan remained an important part of the group’s Australian operations. In April 2005, the company won an A$262 million (US$200 million) contract to supply 81 passenger cars for Sydney’s overburdened commuter rail system.
Also in April 2005, the company completed its first major overseas acquisition, paying A$45 million (US$35 million) for Premas International, a real estate services company based in Singapore. This purchase gave United an important foothold in the real estate and facilities management services markets in Singapore, Malaysia, Thailand, China and other Asian markets.
Soon after buying Premas, United Group completed a further ambitious acquisition. In June 2005, the company agreed to acquire transport engineering and services giant Alstom’s Australian and New Zealand operations. United Group agreed to pay A$267.5 million (US$200 million) for these operations, allowing the company to enter the tram market while strengthening its light rail passenger car business. As part of the acquisition agreement, United Group also formed a strategic alliance with Alstom.
These purchases helped fuel United’s revenue growth with total revenue increasing to over A$1 billion in 2004 and growing to A$2.2 billion by the end of the June 2006 fiscal year. Based on the company’s growth and momentum, United Group became a constituent of the Australian Securities Exchange’s ASX 200 Index.
United completed a new restructuring and rebranding, creating four divisions; United Group Infrastructure; United Group Rail; United Group Resources; and United Group Services adopting the initials ‘UGL’ as part of its corporate logo. The company also moved its headquarters to Sydney during this time, underscoring its transformation from a regional company to an -increasingly multinational engineering group.
United Group continued its acquisition drive, completing a number of smaller acquisitions in 2006, including Goulburn Railway, Steelplan, business technology specialist Fischer Industries, and security services firm Peak Securities.
Expanding the Property Services platform
In 2006, United Group prepared to expand into the North American market with the announcement of an agreement to pay US$163million to acquire Equis Corp. founded in Chicago in 1984 and a leading supplier of corporate real estate services. Equis operated 26 offices across the United States, with operations in Hungary, India, Mexico and China. The company’s client list included such blue-chips as DaimlerChrysler, AT&T, Bayer, Nestle, GlaxoSmithKline and Citigroup. Following the acquisition, Equis was merged with Premas and United’s Services division, forming United Group Global Services.
In July 2007 United completed another major North American acquisition, acquiring Unicco of Newton, Massachusetts, a leading player in the still highly fragmented US property services and facilities management sectors.. This purchase, at A$477 million, was the company’s largest acquisition to date. The addition of Unicco now meant that nearly two-thirds of the group’s 30,000 people were now based outside of Australia. In 2007 United acquired a telecommunications business, Proactive Communication Solutions, for A$0.98 million.
United’s revenues grew to A$3.5 billion by 2008. Importantly, as the world entered the global financial crisis (GFC), the company’s order book remained strong, growing to A$7.4 billion. By the end of 2009, the company posted new revenue gains with total revenue increasing to A$4.8 billion. The company changed its name to UGL Limited during this time. Amid the uncertainty of the global financial crisis, the group placed its acquisition strategy on hold.
The GFC impacted UGL’s growth trajectory in 2010, and revenue declined to A$4.4 billion. Nonetheless, the company’s earning remained strong, at A$151 million for the year. The company also boasted a solid order book valued at more than A$9.1 billion. In 2011, UGL’s revenue grew once more, increasing to A$4.6 billion. The company continued to maintain a strong order book, which stood at A$8.2 billion. Importantly, nearly three-quarters of the group’s order book was composed of long-term, recurring maintenance projects, providing the group with a strong degree of financial stability for the foreseeable future.
Creating a Global Property Services Leader
In December 2011, UGL celebrated a new acquisition, acquiring the trading operations of UK-based DTZ Holdings plc for £77.5 million (A$119 million). DTZ’s history stretches over 225 years and was first founded in 1784 in Birmingham, UK. This purchase, which significantly expanded operations in Asia, North America, the United Kingdom, Europe and the Middle East, saw UGL become a global leader in property services. In 2012, the property services business was rebranded under a single global brand: DTZ, a UGL company.
Richard Leupen, whose contract has been extended to March 2014, is one of Australia’s longest-tenured CEOs, succeeding in his efforts to transform UGL. In just a decade, UGL’s revenues grew at a cumulative average rate of 20 per cent per annum and total returns to shareholders grew at a cumulative average growth rate of 19.9 per cent compared to 6.9 per cent for the S&P/ASX 200 Index. UGL looks forward to continuing to deliver sustainable growth for many years to come.
DTZ sale completion
November 2014 saw UGL completee the sale of DTZ for $1.215 billion to a consortium comprising TPG Capital, PAG Asia Capital and Ontario Teacher’s Pension Plan (together TPG and PAG Consortium).
UGL today is a market leader focussed on end-to-end outsourced engineering, asset management and maintenance services across Australia, New Zealand and South East Asia employing more than 7,000 people with annual revenue in excess of $2.3 billion. We maintain diversification across markets through our core sectors of rail, transport & technology systems, power, resources, water and defence.
UGL continues to move forward under the strength of the UGL brand which is an expression of our client focused approach delivering integrated life cycle solutions across multiple sectors to create, enhance and sustain the critical assets of our clients.