- Strategic Environment platform uniquely positioned to capitalize on ESG trends and the related
US$1.25 trillion Environmental market(1). - Earth sciences and Environmental consulting services to represent c. 25% or
$2 billion of WSP’s total$8 billion pro forma net revenues(2), achieving a key milestone of its 2019-2021 Global Strategic Plan. - Enhances proportion of net revenues(3) from strategic advisory services to approximately half of WSP’s total net revenues(3).
- Immediately increases adjusted EBITDA margin(3) (pre-synergies) toward the higher end of its 2021 strategic ambitions.
- Highly complementary service offering and customer base provides significant cross-selling opportunities across all of WSP’s end-markets.
- Establishes long-term relationships with GIC, one of the world’s largest sovereign wealth funds with an established global network, and
British Columbia Investment Management Corporation , one ofCanada's largest institutional investors. - Transaction overwhelmingly supported by Golder’s Partners.
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“Together we will create the leading Global Environmental Consulting Firm with approximately 14,000 of our 54,000 professionals dedicated to accelerating the world’s green transition. The combination ideally positions WSP to capitalize on the rapidly growing ESG trends driving demand for environmental services and sustainable infrastructure development”, commented Alexandre L’Heureux, President and Chief Executive Officer of WSP. “WSP looks forward to welcoming Golder’s employees and joining forces with such a well-respected environmental consulting brand. Golder is a global leader in earth sciences and environmental services. This acquisition directly contributes to the realization of the goals we laid out in our 2019-2021 Global Strategic Plan and is expected to contribute to both strategic growth and value creation for many years to come. Furthermore, the strategic relationships with GIC and BCI mark another important milestone for WSP to actively continue our acquisition strategy”, he added.
Also commenting on the Acquisition, Dr.
FINANCIAL HIGHLIGHTS
- Acquisition of Golder for an enterprise value of
US$1.14B (approx.CAD$ 1.5B ) representing 10.4x Golder’s 2020 pre-IFRS 16 adjusted EBITDA or 8.4x post-synergies(2,4). - Immediately accretive(2) to WSP's adjusted earnings per share(3), with accretion(2) increasing to the mid-teens once synergies are fully realized(4).
- Annual cost synergies of approximately
$35 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 exceed$35 million in the aggregate(4). - Private placements of
C$310 million of subscription receipts (at a price of$92.98 per subscription receipt) supported by aC$260 million investment byGIC Private Limited (“GIC”), one of the world’s largest sovereign wealth funds, with an established global network, and aC$50 million investment byBritish Columbia Investment Management Corporation (“BCI”), one ofCanada's largest institutional investors with a global portfolio of more thanC$170 billion . - Remaining portion of the acquisition funded from a new
US$960 million (approximatelyC$1.2 billion ) underwritten bank financing, expected to result in an estimated 1.3x pro forma net debt to adjusted EBITDA ratio(2,4) upon closing, remaining within WSP’s targeted leverage range of 1.0x to 2.0x. - Acquisition expected to be completed in the first half of the second quarter of 2021.
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(1)
(2) Non-IFRS measures. These measures are defined in the “Non-IFRS measures” disclaimer below.
(3) Non-IFRS measures. These measures are defined in section 19, “Glossary of non-IFRS measures and segment reporting measures” of the Corporation's Management's Discussion & Analysis for the third quarter and nine-month period ended
(4) Forward looking statements. Please refer to the “forward-looking statements” disclaimer below.
ACQUISITION FINANCING
The Acquisition and other related transaction costs are to be funded by
“We are impressed with WSP’s world class global and environmental advisory platform and look forward to supporting its expansion”, said Jean-René Adam, Vice President, Active Portfolio Management, Public Markets, BCI. “This is a strong company for our clients’ public markets portfolio and is aligned with our strategy for seeking value-add opportunities from ESG.”
CONDITIONS TO THE ACQUISITION
The Acquisition, which is expected to be completed through a plan of arrangement, remains subject to certain customary closing conditions, including (i) Court approval, (ii) shareholder approval by not less than 75% of the votes cast by shareholders, voting as a single class, at a special meeting of Golder shareholders, and (iii) applicable regulatory approvals. The special meeting of the Golder shareholders to consider and vote on the Acquisition is expected to be held on or about
Approximately 99% of Golder’s Partners in conjunction with Golder Employee shareholder Trust, which hold together approximately 82.8% of all Golder shares outstanding, have entered into voting and support agreements with WSP to vote in favour of and support the Acquisition.
The Arrangement Agreement provides for a customary non-solicitation covenant on the part of Golder, which is subject to customary "fiduciary out" provisions in effect before the Special Meeting and a right in favour of WSP to match any superior proposal. WSP will receive a termination fee of
FINANCIAL AND LEGAL ADVISORS
CONFERENCE CALL
WSP will host a conference call to discuss the Acquisition today,
ABOUT WSP
As one of the world’s leading professional services firms, WSP provides engineering and design services to clients in the Transportation & Infrastructure, Property & Buildings, Environment, Power & Energy, Resources and Industry sectors, as well as offering strategic advisory services. WSP's global experts include engineers, advisors, technicians, scientists, architects, planners, environmental specialists and surveyors, in addition to other design, program and construction management professionals. Our talented people are well positioned to deliver successful and sustainable projects, wherever clients need us. For more information about WSP, please visit wsp.com.
ABOUT GOLDER
Founded in 1960 and headquartered in
ABOUT GIC
GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. A disciplined long-term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including equities, fixed income, private equity, real estate and infrastructure. GIC invests through funds and directly in companies, partnering with its fund managers and management teams to help world-class businesses achieve their objectives. GIC has investments in over 40 countries and has been investing in emerging markets for more than two decades. Headquartered in
ABOUT BCI
With
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 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 news release include, without limitation, those information and statements related to the Acquisition, the Private Placements, the underwritten bank financing, the use of proceeds of the Private Placements and the underwritten bank financing, 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 Golder’s business, the loss of certain key personnel of Golder, 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 required Golder shareholder approval or Court approval, 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 Golder, potential undisclosed costs or liabilities associated with the Acquisition, the absence of a financing condition in the Arrangement Agreement, the reliance on information provided by Golder, 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 EBITDA margin; adjusted net earnings; adjusted net earnings per share; and net debt to adjusted EBITDA ratio. Additional details for these non-IFRS measures can be found in WSP’s MD&A for the third quarter and nine-month period ended
The following non-IFRS measures are also used by the Corporation and defined as follows: “Pro forma net revenue” is defined as net revenue as if the net revenues of Golder were included for the entire period. “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 adjusted EBITDA of Golder minus lease payments as included in the cash flow statements. “Pro forma adjusted EBITDA” means the aggregate adjusted EBITDA of WSP and Golder. “Pro forma net debt” means net debt after giving effect to the Acquisition, the Private Placements, the underwritten bank financing and any Acquisition related adjustments. “Pro forma net debt to adjusted EBITDA ratio” is calculated using pro forma net debt to the pro forma adjusted EBITDA. “Pro forma adjusted EBITDA margin” is defined as the aggregate adjusted EBITDA of WSP and Golder expressed as a percentage of pro forma net revenues after giving effect to the Acquisition and any Acquisition related adjustments.
The non-IFRS financial measures used in this news 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 transaction. 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. THE SUBSCRIPTION RECEIPTS WILL NOT BE REGISTERED UNDER
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Chief Financial Officer
alain.michaud@wsp.com
Phone: 438-843-7317
Source:
2020 GlobeNewswire, Inc., source