Directors of UK engineer agree to £278m take-over
Engineer WSP has agreed to be bought by Canadian consultant Genivar in a deal worth £278m.
The offer represents a 67% premium on WSP’s 260p closing share price last night, and has been approved by WSP’s directors.
The firms said that they will continue to trade under their existing brands for the time being, with a view to renaming the combined group WSP Genivar “as soon as practical following completion of the merger.”
The merger will create a 15,000-strong professional services firm with a turnover of over £1.1bn.
The deal will see the combined firm listed on the Toronto stock exchange, with current WSP chief executive Chris Cole given the role of executive chairman of the combined entity. Pierre Shoiry and Alexandre L’Heureux, currently chief executive officer and chief financial officer of Genivar, will remain in those roles.
The existing executive directors of WSP Paul Dollin, Rikard Appelgren and Stuart McLachlan will also remain in their roles.
Genivar provides private and public sector clients with services in planning, engineering, surveying, environmental sciences, and projects and construction management. Despite being less than two-thirds the size of WSP in terms of staff numbers and turnover, the professional services firm had, as of yesterday, a market value of £516m, more than three times that of WSP, valued at just £166m.
Genivar has been able to use its share price strength to finance the deal, having already received irrevocable undertakings and letters of intent from financial institutions to fund 37% of the deal.
WSP has worked on high profile projects including the Shard in London and the Birmingham Bullring. It last year posted profits of £33m on revenue of £717m, has 9,000 staff spread across 30 countries. In contrast Genivar works primarily in its domestic Canadian market, and has 5,500 staff.
Chris Cole said the merger had come about after reviewing carefully options to best achieve the WSP’s growth aims. He said: “An exceptional opportunity has arisen for WSP to merge with Genivar, a similarly ambitious entrepreneurial yet complementary Canadian consultancy. I believe this transaction will provide WSP, our staff and our clients with enhanced opportunities and the combined entity will achieve increased prominence in the global markets in which we work.”
Pierre Shoiry said the deal was a landmark transaction and an important milestone in the history of Genivar. He said: “Genivar and WSP are highly compatible in terms of culture and strategic objectives. They are both pure play consulting firms, sharing similar values with respect to people, clients and teamwork. We believe that the combination provides a unique opportunity for our clients, employees and shareholders to benefit from the global scale and breadth of services offered by the combined entity.
“Moreover, our firms are complementary with limited geographical overlap, combining talented teams to enhance the leadership and expertise of the global organisation.”
Shares in WSP immediately rocketed on the news, settling at just below the 435p a share offer.
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