- The transaction is aligned with WSP’s 2022-2024 Global Strategic Action Plan and its long-term vision as it:
- Expands the leadership of WSP’s global Earth & Environment consultancy with approximately 20,000 experts, which will represent about 1/3 of WSP’s annual net revenues globally.
- Adds
US$830 million (approximatelyC$1,050 million ) of net revenue1,3,4 expanding on WSP’s stated goal of achieving greater thanC$10 billion in net revenues by 2024. - Significantly increases WSP’s presence in
OECD countries, such as the US,Canada , and theUK . - More than doubles WSP’s Earth & Environment practice in
the United States to create nationwide leadership and scale, with longstanding relationships with federal, state, and local governments; and - Enhances WSP’s scale and capabilities in the Water sector, which is now expected to represent a total of
C$830 million in annual revenues globally5.
- Increases opportunity to provide consulting and engineering services for sustainable assets across our existing leading Transportation & Infrastructure, Earth & Environment and Property & Buildings franchises.
- Provides significant opportunity to realize additional revenue by bringing together a broader range of expertise to WSP’s and E&I’s respective and complementary client bases.
“The acquisition of Wood’s E&I business will directly contribute to the realization of the ambitions we set out in our 2022-2024 Global Strategic Action Plan. WSP’s leading Global Earth & Environment Consultancy will now have approximately 20,000 experts globally with increased capabilities and reach, including key expertise in the high growth water sector and an expanded offering to Federal and government clients,” commented Alexandre L’Heureux, President and Chief Executive Officer of WSP. “Our platform will be increasingly diversified and resilient, with increased scale in geographies which we have identified for growth such as
“Throughout this process, I’ve been impressed with WSP’s growth story, excellent capabilities, focus on clients and the future aspirations for its business,” said
FINANCIAL HIGHLIGHTS
- Acquisition of E&I for a total cash consideration of
US$1.81 billion (approximatelyC$2.31 billion ) including the net present value of aUS$200 million transaction-related tax benefit. The net transaction value ofUS$1.61B (ApproximatelyC$2.04 billion ) represents 14.6x E&I’s estimated 2022 pre-IFRS 16 EBITDA1,3 or 11.5x post-synergies. - Immediately accretive to WSP’s adjusted earnings per share , and 2024 accretion increasing to mid-teens once synergies are fully realized3.
- Expected annual cost synergies of approximately
US$30 million (approximatelyC$38 million ) expected to be achieved over a 24-month period, with 50% to be realized within the first twelve months after the closing date. Costs required to realize such annual cost synergies estimated not to exceedUS$30 million (approximatelyC$38 million ) in the aggregate3. - Transaction to be financed with a new
US$1.81 billion (approximatelyC$2.31 billion ) fully committed term credit facility, expected to result in an estimated 2.0x pro forma net debt to adjusted EBITDA ratio1,3 upon closing, remaining within WSP’s targeted leverage range of 1.0x to 2.0x. - Acquisition expected to be completed in the fourth quarter of 2022.
ACQUISITION FINANCING
The Acquisition is to be funded by a new fully committed
CONDITIONS TO THE ACQUISITION
Closing of the Acquisition is subject to certain customary closing conditions, including (i) the approval of Wood’s shareholders, (ii) completion by Wood of a group reorganization to achieve separation of the E&I business, and (iii) applicable regulatory conditions. The Acquisition is expected to be completed in the fourth quarter of 2022.
FINANCIAL AND LEGAL ADVISORS
CONFERENCE CALL
WSP will host a conference call to discuss the Acquisition today,
Non-IFRS measures. Please refer to the "non-IFRS measures" disclaimer below.
2 Non-IFRS measures. These measures are defined in section 19, “Glossary of segment reporting measures”, non-IFRS and other financial measures of the Corporation's Management's Discussion & Analysis for the three-month period ended
3 Please refer to the “forward-looking statements” disclaimer below.
4 Estimate based on twelve-month period ending
5 Pro Forma with E&I based on twelve-month period ended
ABOUT WSP
As one of the world’s leading professional services firms, WSP exists to future-proof our cities and environment. We provide strategic advisory, engineering, and design services to clients in the transportation, infrastructure, environment, building, power, energy, water, mining, and resources sectors. Our 55,000 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities we serve through a culture of innovation, integrity, and inclusion. Sustainability and science permeate our work. WSP derived about half of its
ABOUT E&I
E&I was formed through various acquisitions under Amec and
FORWARD-LOOKING STATEMENTS
This press release contains information or statements that are or may be “forward-looking statements” within the meaning of applicable Canadian securities laws. When used in this press release, the words “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “forecast”, “project”, “intend”, “target”, “potential”, “continue” or the negative of these terms or terminology of a similar nature as they relate to the Corporation, an affiliate of the Corporation or the combined firm following the Acquisition, are intended to identify forward-looking statements. Forward-looking statements in this press release include, without limitation, those information and statements related to the Acquisition, the new term credit facility, the expected timing of completion and benefits of the Acquisition, the conditions precedent to the closing of the Acquisition and the Corporation's future growth, results of operations, performance business, prospects and opportunities, the expected synergies to be realized and certain expected financial ratios. Although the Corporation believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that they will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements, including risks and uncertainties relating to the following: the possible failure to realize anticipated benefits of the Acquisition, the integration of E&I’s business, the loss of certain key personnel of E&I, the possible failure to achieve the anticipated synergies, the failure to close the Acquisition or change in the terms of the Acquisition, failure to obtain the regulatory approvals in a timely manner, or at all, increased indebtedness, transitional risk, the fact that WSP does not currently own E&I, potential undisclosed costs or liabilities associated with the Acquisition, the absence of a financing condition in the Agreement, the reliance on information provided by E&I, change of control and other similar provisions and fees, the nature of acquisitions, the exchange rate on the closing date of the Acquisition, the fact that the combined firm will continue to face the same risks that the Corporation currently faces, potential litigation and other factors discussed or referred to in the “Risk Factors” section of WSP's Management’s Discussion and Analysis for the year ended
NON-IFRS MEASURES
The Corporation reports its financial results in accordance with IFRS. In this press release, the following non-IFRS measures are used by the Corporation: net revenues; adjusted EBITDA; adjusted net earnings; adjusted net earnings per share; and net debt to adjusted EBITDA ratio. These measures are defined in section 19, “Glossary of segment reporting measures, non-IFRS and other financial measures” of WSP's Management’s Discussion and Analysis for the three-month period ended
The following non-IFRS measures are also used by the Corporation in this press release and defined as follows: “Net revenues” as it relates to E&I has the same definition as WSP’s definition of “net revenues”, being revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from clients. “Accretion” or “accretive” is defined as the expected change in WSP’s adjusted net earnings per share after giving effect to the Acquisition and any Acquisition related adjustments. “Pre-IFRS 16 adjusted EBITDA” means the estimated adjusted EBITDA of E&I minus lease payments as included in the cash flow statements for the twelve-month period ending
The non-IFRS financial measures used in this press release do not have a standardized meaning as prescribed by IFRS. Management of the Corporation believes that these non-IFRS measures provide useful information to investors and analysts for analyzing the Acquisition. These non-IFRS measures are not recognized under IFRS and may differ from similarly-named measures as reported by other issuers, and accordingly may not be comparable. These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.
NO OFFER OR SOLICITATION
THIS PRESS RELEASE IS NOT INTENDED TO AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR BUY, OR THE SOLICITATION OF AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR PROXY FROM ANY PERSON.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Chief Financial Officer
alain.michaud@wsp.com
Phone: 438-843-7317
Source:
2022 GlobeNewswire, Inc., source