McKinsey acquires capital projects consultancy Westney Consulting
Strategy firm McKinsey & Company has acquired Houston-based Westney Consulting, a leading advisory firm in the capital projects space.
The move bolsters McKinsey’s capital projects & infrastructure practice, which helps clients with major project delivery, project organization design, portfolio optimization, digital & innovation, and capital matching. McKinsey has been ranked the top consulting firm in the industry by ALM Intelligence for the past five years.
Westney Consulting, which was founded in 1978, is also ranked in the top five capital projects and infrastructure consultancies by ALM. The firm, which has particular expertise in the energy space, has supported $250 billion of global energy projects since 2012.
The company was in part targeted by McKinsey for its robust projects database, built up over 40 years of consulting. The firm uses a top-down assessment approach with strong data-driven methods to help predict the most realistic range of project outcomes for clients.
“Westney has been consistently recognized for having the world’s deepest benchmarks for analyzing and predicting future project performance,” Filipe Barbosa, McKinsey senior partner, said. “They provide project-cost and schedule-prediction transparency like no one else.”
McKinsey had in the past 10 years worked with Westney on over 80 projects in energy, mining, and other sectors.
“This is a natural and exciting progression to our long-term relationship with McKinsey,” Dick Westney, founding principal, said. “Combining McKinsey’s global reach, capabilities, and insights with Westney’s pattern-recognition power will significantly expand our clients’ abilities to benchmark large capital projects and locate specific drivers of cost overruns, delays, and quality issues to make better decisions.”
The acquisition will further boost McKinsey’s digital, data, and analytics capabilities in the construction sector, which has so far seen less digitization than retail or manufacturing, according to the firm. Westney’s data sets will augment the strategy firm’s energy insights capabilities and major project delivery expertise, which the firm says leads to an average 20-40% productivity increase.
McKinsey is generally reserved in its approach to M&A, making select targeted acquisitions of leading industry firms. The Westney acquisition is its first major deal since 2017, when its acquired leadership and change consultancy Aberkyn, and digital and design consulting firm VLT Labs.
