WSP Global (WSP) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition creates a global leader in pure-play consulting for the energy transition, significantly expanding U.S. presence and sector diversification.

• POWER Engineers brings a premier brand, technical excellence, and deep client relationships, with 90%+ repeat client revenue and a 20-year average client relationship.

• The deal diversifies the platform, establishing Power & Energy as a core end-market and enabling cross-selling and expertise sharing across a network of about 73,300 experts.

• Acquisition is timed to capitalize on surging investments in grid modernization, clean energy, and electrification, with $171B invested by U.S. utilities in 2023 and a $1.5T gap projected by 2040.

• Integration of POWER's technical expertise and innovation, including digital tools like POWER360, enhances project delivery and market reach.

Financial terms and conditions

• Purchase price is US$1,780 million (approx. $2,443.9 million CAD), representing 15.2x 2024E pre-IFRS 16 adjusted EBITDA or 12.5x post-synergies.

• Up to US$170 million in incentive awards to be paid over three years, with a net present value cost of up to US$107 million.

• Funded by a $1 billion equity raise ($500 million public, $500 million private placements) and US$1,780 million in committed term loans.

• Equity raise includes private placements from GIC, CDPQ, BCI, and CPP Investments.

• Pro forma net debt to adjusted EBITDA ratio expected to be 2.2x at closing.

Synergies and expected cost savings

• Minimum of US$25 million in annual cost synergies targeted by end of 2026, with 50% realized by end of 2025; cost to realize synergies estimated at US$25 million.

• Acquisition expected to be immediately accretive to adjusted net earnings per share, with mid-single digit accretion projected for 2026 after full realization of synergies.

• Significant revenue synergy opportunities identified, including cross-selling and margin enhancement.

• POWER Engineers to benefit from access to global productivity levers and resource centers.