Canadian Manufacturing

Genivar buys U.K. firm for $442 million



MONTREAL—Engineering and consulting firm Genivar Inc. has signed a cash deal to buy British company WSP Group PLC for $442 million.

Genivar expects the deal will be immediately accretive to its earnings per share without any revenue and cost synergies.

Under the agreement, WSP chief executive Christopher Cole will become executive chairman of Genivar, while Genivar chairman Richard Belanger will become the lead independent director.

Including pension liabilities, the enterprise value of the deal is about $637 million.

To finance the purchase, Genivar said it will raise $225 million in a bought deal public offering of subscription receipts and $197 million in a private placement with two existing shareholders—the Canada Pension Plan Investment Board and the Caisse de depot et placement du Quebec.

Genivar has also signed a deal for a new $400-million revolving credit facility.

The $98.5-million investment by the Caisse will more than double its stake in Genivar to nearly 7.4 million shares or about a 15 per cent interest in the company.

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