The firm WSP achieves its biggest catch: 1.5 billion

(Montreal) While the theme of green recovery is popular around the world, the engineering services firm WSP Global is increasing its presence in the environmental sector by acquiring Golder from Ontario for approximately 1 , 5 billion in cash.

Julien arsenault
The Canadian Press

In addition to representing the largest acquisition to date by the Quebec multinational, this transaction, announced Thursday, will lead to the creation of the “largest global environmental consulting services company,” said its president and chief executive officer. direction, Alexandre L’Heureux.

“I considered that there was a gaping hole because there was no dominant player who could take this place while this theme will continue to gain momentum, he explained in the context of ” a telephone interview with The Canadian Press. We are transforming the organization. ”

On the Toronto Stock Exchange, the deal was hailed by investors, as the Montreal-based company’s stock hit a new high of $ 112.80. As of Thursday afternoon, the stock was trading at $ 110.35, up 14%, or $ 13.56.

WSP is the largest engineering firm in the country in terms of market value, which hovers around 12.5 billion.

When the transaction closes, scheduled for the second quarter of next year, 14,000 of the company’s 54,000 employees will be dedicated to the environment sector, which will account for a quarter of its $ 8 billion revenue, a target of the plan. strategic. The addition of Golder will allow WSP to offer both advisory services as well as participate in the design of sustainable development projects such as earth sciences, water remediation and site restoration, among others.

This decision comes at a time when sustainable development is at the heart of the recovery plans that governments around the world are counting on to enable the economy to recover from the health crisis.

“The moment could not have been better chosen for WSP and a Quebec company to take a leadership position as we are doing,” said Mr. L’Heureux.

Four years of preparation

Founded in 1960, Mississauga-based Golder provides engineering services in industries such as the environment, mining, oil and gas, and energy and infrastructure. It is present in 30 countries and its 7,000 employees are located in 155 offices. As of the third quarter, it had generated revenue of $ 1.05 billion.

Trade between the two companies began four years ago and talks intensified around the beginning of September.

Overall, analysts welcomed the transaction. Sabahat Khan of RBC Capital Markets said it was “a good acquisition that meets all the criteria.”

WSP’s environmental sector becomes the second largest behind transport and infrastructure, which accounts for 47% of revenues, and ahead of buildings and buildings, at 21%.

“The acquisition gives WSP a leading position to capitalize on ESG criteria and environmental market trends valued at US $ 1.2 trillion,” wrote analyst Mona Nazir of Laurentian Bank Securities in a note.

Formerly known as Genivar, the company acquired the British WSP in 2012 and then adopted the name of this firm. Over the years, it has made numerous acquisitions to fuel its growth. It had notably extended 1.4 billion in 2014 to buy the American firm Parsons Brinckerhoff.

New investors

The transaction will be financed through private placements as well as through debt. GIC Private Limited, one of the world’s largest sovereign wealth funds, and British Columbia Investment Management Corporation, are involved in the arrangement.

The two main shareholders of WSP will remain the Canada Pension Plan Investment Board and the Caisse de dépôt et placement du Québec, which currently hold 18.6% and 18% of the outstanding securities.

This acquisition of Golder – which is owned by its employees – is subject to customary closing conditions. An extraordinary assembly is scheduled for mid-January. Almost 99% of the Ontario firm’s shareholders who own 82.8% of the shares support the arrangement.