WSP to buy Alberta engineering firm for $366M
The deal is supported by an $80-million investment in WSP divided equally between its two largest investors: the Caisse de depot and the Canada Pension Plan Investment Board
Oil & Gas
mergers and acquisitions
MONTREAL—Engineering consulting firm WSP Group is expanding its reach in Western Canada’s oil and gas sector by trying to acquire Focus Group Holding Inc. for $366 million.
The deal for Focus, a 1,700-employee Alberta engineering and geomatics firm with $280 million of annual revenues, is expected to close in about a month. It has the support of 80 per cent of Focus’ shareholders.
“We truly believe that this transaction is a compelling acquisition which is good news for employees and clients and hopefully will provide our shareholders with long-term value creation,” WSP CEO Pierre Shoiry said.
The deal is supported by an $80-million investment in WSP divided equally between its two largest investors: the Caisse de depot and the Canada Pension Plan Investment Board.
The pension fund managers would each own 15.6 per cent of WSP.
The Caisse invested $98.5 million in 2012 as part of the $442-million acqusition of British-based WSP by Genivar, as the Quebec company was then called.
WSP will also fund the transaction by issuing 5.3 million shares as part of a $180-million public bought deal. The company is also increasing its credit facility by $200 million to $600 million to help prepare for other acquisitions that will help it achieve its target of adding $500 million in revenues from acquisitions and having 20,000 employees before the end of 2015. With the Focus Group acquisition it will have some 16,700 employees worldwide.
Montreal-based WSP said the purchase will increase its Canadian workforce to about 6,100 employees—located in all provinces—while balancing its Canadian platform and providing cross-selling opportunities.
Shoiry said WSP will benefit from Focus’ deep experience in the oil and gas industry, especially in upstream, oil sands, midstream and liquefied natural gas (LNG) export infrastructure development projects.
“Through this acquisition, not only are we expecting to become a more important player in the Canadian oil and gas industry, but also to strengthen our presence in Western Canada,” he said.
Upon closing of the deal, Focus CEO David Ackert will head WSP Canada and become director of its global oil and gas network.
The addition of Focus is expected to increase earnings by 10 per cent, excluding any revenue or cost savings or restructuring expenses. Up to 15 per cent of WSP’s total revenues would then come from the oil and gas sector.
WSP fourth-quarter revenues were forecast to reach $420.6 million. Net revenues for the year were $1.68 billion, up from $1 billion in 2012.