- By Region
Genivar, the Canadian engineering consultancy, has agreed to buy WSP, its bigger, London-listed rival, for £278m in an all-cash deal that will create a global group with $1.8bn in revenues.
The 435p-a-share offer, which WSP’s board plans to recommend, represents a large premium on the UK group’s closing share price of 260p on Thursday. Shares have traded around the 250p mark for most of this year, after a sharp rise following a debt refinancing in December.
The bid values WSP’s equity and debt, including pension liabilities, at £400m, or 7.8 times earnings last year. The group’s 2011 performance was lifted by its Nordic divisions, underscoring its appeal to Genivar, whose geographical reach largely complements WSP’s.
Pierre Shoiry, Genivar’s chief executive, is expected to remain at the helm. Christopher Cole, WSP’s chief, is expected to become executive chairman.
The transaction comes amid consolidation among building- and infrastructure-focused professional services groups, including the purchase last year of Halcrow, the UK engineering consultancy, by CH2M Hill, the Colorado-based company.
The deal will be funded by a new revolving debt facility and public and private share placements. More than one-third of WSP shareholders have said they would approve the sale.
Rothschild advised WSP on the deal.