WSP to acquire Golder 10 Dec 2020

WSP continues its business strategy to create a leading global environmental consulting firm with acquisition of private, employee-owned Golder Associates headquartered in Canada. Together the two companies will employ about 54,000 professionals with 14,000 of those dedicated to accelerating the green transition. “The combination positions WSP to capitalize on the rapidly growing ESG, environmental, social and governance, trends driving demand for environmental services and sustainable infrastructure development”, commented Alexandre L’Heureux, President and Chief Executive Officer of WSP. ESG trends and the related environmental market internationally is currently estimated at US$1.25 trillion by Environmental Business International. Earth sciences and environmental consulting services are expected to represent about 25% or $2 billion of the total US$8 billion pro forma net revenues for WSP and achieve a key marker of its 2019-2021 global strategic plan.

Under the terms of the agreement WSP will acquire all of the issued and outstanding shares of Enterra Holdings Ltd, the holding company of Golder, for an aggregate cash consideration of US$1.14 billion, about CAD$1.5 billion. Private placements of $310 million of subscription receipts are supported by a $260 million investment by GIC Private Ltd, one of the world’s largest sovereign wealth funds based in Singapore, and a $50 million investment by British Columbia Investment Management Corporation, one of largest institutional investors in Canada with a global portfolio of more than $170 billion. The remaining acquisition capital is funded by WSP from a new US$960 million underwritten bank financing agreement.

Financial benefits include the immediate accretive to adjusted earnings per WSP share, with accretion increasing to the mid-teens once synergies are fully realized. Annual cost synergies of approximately $35 million expected to be achieved over a 24-month period with 50% to be realized within the first twelve months after the closing date.

The acquisition remains subject to certain customary closing conditions, including court approval, a minimum 75% vote of approval by shareholders, and applicable regulatory approvals. The special meeting of Golder shareholders to consider and vote on the acquisition is expected to be held in January 2021 with the takeover completed in the second quarter of 2021.

“We look forward to welcoming Golder employees and joining forces with such a well-respected environmental consulting brand,” said L’Heureux. “The complementary service-offering and customer-base of the two companies provide significant cross-selling opportunities across all the WSP end-markets. The acquisition also strengthens the WSP relationships with funding agencies to actively continue our acquisition strategy.”

Dr Hisham Mahmoud, Global President and Chief Executive Officer of Golder said: “Combining our industry expertise, built over the last 60 years, with the platform of complementary services will provide long-term benefits for our employees and help create greater value for our clients. This view is confirmed by the overwhelming support of our Partners for the transaction. I believe that the compatible cultures and values of WSP and Golder will facilitate a successful integration.”

WSP began in 1969 as the Williams Sale Partnership in the UK. In 2012 Genivar of Canada acquired UK-based WSP and in 2014 adopted WSP as the corporate brand. In 2014 WSP began its global expansion strategy with acquisition of the USA-based Parsons Brinckerhoff consultancy firm. Recent global acquisitions include Mouchel Consulting of the UK in 2016; Louis Berger of the USA in 2018; and Ecology and Environment Inc of the USA and Orbicon of Denmark in 2019.

Golder was founded in 1960 in Canada by soil mechanics engineer Dr Hugh Golder, highways engineer Larry Soderman of Canada, and engineer Victor Milligan, originally of Ireland. Through the early 1970s, the firm established operations in Canada, the USA, the UK and Australia while working on projects around the world. Headquartered in Mississauga, Ontario, the firm today has more than 7,000 employees in 155 offices in 30 countries across six continents. In 2017 it acquired the Alan Auld consultancy practice of the UK.