WSP Boosts Growth With Planned $65M Buy of US Engineer
Montreal-based WSP Global Inc., says it intends to grow its U.S. presence further with a planned $65-million acquisition of environmental consultant Lancaster, N.Y.-based Ecology and Environment Inc.
The purchase, announced Aug. 28 and set to close in the fourth quarter, would be the Canadian firm's fifth acquisition this year and would add a firm with about 773 employees.
E&E is publicly traded on the Nasdaq exchange; WSP trades on the Toronto exchange and has about 49,000 global employees.
WSP CEO Alexander L'Heureux said in a statement that the acquisition will increase the firm's stake in U.S. public sector work and in environmental consulting "sectors and services ... targeted for growth, including environmental impact assessment, emergency planning and management, as well as site restoration."
WSP ranks No. 6 on ENR's list of the Top 150 Global Design Firms, reporting $5.17 billion in 2018 worldwide revenue, with 84% of the total outside of Canada. It ranks second on the ENR Top 225 International Design Firms list, up from No. 4 the previous year.
In expanding its design firm platform, WSP purchased U.S.-based Louis Berger last year, and since January, announced deals to buy health-care engineer Leach Wallace Associates Inc., based in Elkridge, Md., as well as consultants in the U.K., France, and Switzerland.
In an Aug. 16 second-quarter results call, L'Heureux said net revenue of $1.8 billion (C) rose 4.8% compared to the same period in 2018. The firm said its adjusted quarter profit was about 15%, with backlog at $7.9 billion (C), up 2.1% compared to the the 2018 second-quarter.
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E&E ranks at No. 95 on ENR's Top 200 Environmental Firms ranking, reporting about $91 million in environmental services revenue in 2018. About 40% of revenue is for private clients; with the rest split between federal and municipal sector work.
Among its clients is the Army Corps of Engineers, the U.S. Navy and the New York State Energy Research Development Agency, for which it is developing the state's offshore wind power master plan. New York has announced plans to build 9GW of offshore wind capacity by 2035.
Benoit Poirier, analyst for Desjardins Securities Inc. said in a research note the purchase could help “reignite net organic growth” for E&E in the future.
The firms did not announce new roles for E&E top executives, but that firm noted on July 31 the retirement of Ronald L. Frank, a co-founder who had been secretary and executive vice president. Succeeding him now is Colleen C. Mullaney-Wesfall, former vice president of corporate regulatory and legal affairs. Frank remains an E&E board member.
In previously discussed corporate strategy, L’Heureux has noted plans to grow WSP, through M&A and organically, to net annual revenue of about $8 billion (C) and a workforce of 65,000 by the end of 2021.
