Acquisition of nearly 2.3 billion for WSP Global

Montreal-based consultancy giant WSP Global is gaining ground in the environment market in America and Europe with the $1.8 billion acquisition of a sectoral division of Scottish John Wood plc.

Posted at 8:00 am

Martin Valeris

Martin Valeris

The deal, worth C$2.27 billion, which WSP will pay in cash, will add just over $1 billion to its annual net revenue. Thus, WSP will approach its strategic goal of crossing the 10 billion annual net revenue threshold within two years.

In the opinion of its President and CEO, Alexandre Leroux, “the acquisition of [la division] John Wood’s E&I will contribute directly to achieving the ambitions set out in the Global Strategic Action Plan 2022-2024.”

“WSP’s Earth Science and Environmental Environmental Consulting Services will reach nearly 20,000 people. Our platform [en environnement] It will be increasingly diverse and flexible. It will have a stronger presence in the geographies we have identified for growth, such as the United States, where our Earth and Environmental Sciences team will double in size. »

From John Wood plc, CEO of E&I Joe Szorko said he was “impressed by WSP’s growth history, excellent capabilities, customer focus, and future aspirations for his company.

As a result, he says he “looks forward to the new opportunities that will arise in [ses] staff and [ses] customer result [son] Merger with WSP”.

Meanwhile, in the stock market, investors in WSP shares welcomed the announcement of another major acquisition, which has been in the pipeline since the last update of its medium-term business plan.

Shortly after the announcement, Wednesday morning, the market value of WSP shares jumped more than 8% to cross the $150 threshold. At the end of the session, on the Toronto Stock Exchange, WSP was trading at $146 per share, up 5% from Tuesday.

At that level, WSP’s stock market value is up about 12% from its one-year low of $130 per share, which was hit in mid-May. However, this market capitalization is still well below the historic high of $187 per share reached in mid-November 2021.

Well received by analysts

Among the analysts who monitor WSP, Benoit Poirier, of Desjardins Securities in Montreal, notes in a notice to his investor clients that he is “delighted with the announcement of this strategic acquisition by WSP, as it should strengthen its presence in the United States. It states; a promising market will benefit from Publication of the US Government’s Infrastructure Program”.

For his part, Maxim Sychev, of the National Bank of Finance in Montreal, believes that “this acquisition once again proves that WSP, regardless of the macroeconomic context, is able to create high-quality assets with high-value potential to add to its business plan.”

According to Mr Sychev, “Investors [en actions de WSP] We should appreciate this deal, as it will add to WSP’s ability in the environmental sector to the point of making it one of the world’s leading engineering consultancy firms in the sector.”

At Scotia Capital, Montreal analyst Mark Neville says he “likes the business logic of this WSP acquisition for the main reasons: It significantly expands WSP’s business into the high-growth waterworks and environment market; it adds a highly integrated customer base between levels of government in the United States (Federal, government, etc.) and major industrial companies Fortune-500; will balance WSP’s business across diverse markets, geographies, and customer groups.”

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