MONTREAL – WSP Global says it is strengthening its footprint in Ontario by buying one of Canada’s largest privately owned engineering consulting companies for $425 million.
The Montreal-based firm said MMM Group has expertise in transportation, infrastructure, environment and buildings.
Ontario accounted for 75 per cent of MMM Group’s $264 million in net revenues last year.
With the addition of MMM Group’s 2,000 Canadian employees in seven provinces, WSP Global (TSX:WSP) said it will have about 8,500 employees in Canada, including 3,200 in Ontario, and about $1 billion in Canadian revenues.
WSP Global’s global workforce will increase to 34,000 as a result of the acquisition.
WSP said the transaction will especially boost its presence in Greater Toronto, where it sees opportunities to make money due to aging infrastructure and population growth.
WSP has a goal of increasing its net revenues to $6 billion by 2018 and have 45,000 employees. In the second quarter, it earned $45.8 million on $1.09 billion of net revenues.
The deal is being funded from a $175 million public offering, a $125 million private placement shared evenly by existing WSP shareholders Canada Pension Plan Investment Board (CPPIB) and the Caisse de depot et placement du Quebec, as well as the use of existing credit facilities.
In addition to its new $62.5 million investment, Quebec’s pension fund manager said it has invested about $420 million over the past four to years to allow WSP to broaden its global reach.
MMM Group chief executive Hugo Blasutta will join WSP, but David Ackert will remain CEO of WSP Canada.
The transaction is expected to be completed in the fourth quarter.
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