Companies
Observers Weigh Possible WSP Acquisition Bid for Jacobs
Wall Street online media platform speculated that industry giant WSP Global Inc. aims to acquire major industry player Jacobs Solutions Inc., which could create a firm of 120,000 employees.
Speculation late last week from a Wall Street online media platform that WSP Global Inc. is seeking to acquire major player Jacobs Solutions Inc. has analysts and executives seeing the potential deal as plausible, but with market overlap and cost-synergy risk.
According to an Oct. 26 note to investors from Baird Equity Research, Street Insider reported on Oct. 24, citing unnamed sources, that Montreal-based WSP approached Dallas-based Jacobs “for a largely stock-financed combination,” claiming that the latter has hired Centerview Partners “as a banking advisor.” No further transaction details were disclosed. Andrew Wittmann, Baird lead construction sector analyst estimates about a 75%-25% stock and cash split, “unless WSP raises cash equity” from its investors.
The firms did not comment on the speculated deal, but WSP CEO Alexander L'Heureux told Canada's Globe and Mail last year that “For what will be required in terms of investment in digital transformation in the next few years, I think you need size.” He added, “If there was a large opportunity, we’re clearly open for business.”
WSP reported total revenue of about $16 billion in 2024, up 12% from 2023. For its 2025 second quarter, the firm reported adjusted net earnings of $307 million and adjusted earnings per share of $1.72, both up 30% from the same period one year earlier. The firm will release third-quarter results on Nov. 5. Its market cap is currently estimated at about $26 billion.
Jacobs reported total revenue of $11.5 billion for its 2024 fiscal year, up nearly 6% from the previous year, with adjusted earnings per share of $1.62 for its fiscal 2025 third quarter ending in June, beating analysts' $1.56 estimate and and an estimated current market cap of about $18.9 billion Its fourth-quarter and full-year results are set for release on Nov. 20.
Both firms have long histories of growth by acquisition. Last year WSP acquired U.S.-based engineering firm Power Engineers, which added 4,000 employees and solid energy sector market share to its stable. The U.S. market now makes up about 40% of WSP net sales.
“WSP's M&A history has been comparatively more successful relative to performance than at other consulting/engineers.” said Wittmann.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
WSP's other major acquisitions include the $2.3-billion purchase of the environmental and infrastructure division of U.K-based Wood Group in 2022 and the $1.4-billion buy of Canada-based Golder Associates in 2021. WSP had also reportedly been in talks in 2020 to buy AECOM, set to be its largest ever deal, but halted them due to COVID-19-related business risk. Jacobs completed a merger of its Critical Mission Solutions and Cyber and Intelligence businesses with consultant Amentum in 2024, forming a separate company now traded on the New York Stock Exchange.
“Both firms have tailwinds with reshoring capex and public works trends in attractive global sectors like mission critical, water, power, etc. You could end up seeing the first combined firm with $50 billion-plus market cap with a formidable international presence,” said one analyst.
According to Wittmann, a Jacobs acquisition would improve both firms’ cost synergies and margins, and contribute to WSP's “greater market presence in water infrastructure where [it] has less scale in an above-average growth market.” WSP also would benefit from Jacobs’ larger market position in advanced manufacturing and life sciences, “mostly absent from [its] offerings.” One industry executive sees water as a steady “but not explosive” market, and notes that neither firm has design-build capabilities, which could be needed.
In an Oct. 26 note, National Bank of Canada analyst Maxim Sytchev said the WSP connection would offer the legacy Jacobs business “deeper international reach,” but he warned that "the potential combination strongly echoes the speculation that surrounded the WSP-AECOM transaction, with similar debates around scale, fit, and deal structure.” Wittmann added that the two firms’ large overlapping transportation/infrastructure practices have “dis-synergy potential.”
While both firms "have had much experience in acquisition integration/restructuring/reorganization," said Wittmann, who ranks WSP’s track record as “above average,” he noted the deal “as a net risk” to Jacobs’ increasing earnings, “so the timing seems off.”
