MONTREAL — WSP Global Inc. is extending its shopping spree with the purchase of Dutch consulting firm Lievense Holding B.V. — WSP’s seventh acquisition this year — in an ongoing bid to overtake rival SNC-Lavalin Group Inc.
The Montreal-based engineering company announced Friday it will pay an undisclosed amount for the deal through available cash and credit facilities.
The 375-employee Lievense firm gives WSP a foothold in the Netherlands and tacks on between $47 million and $56 million in additional annual revenue, according to analyst estimates. WSP’s 2018 net revenues were $6 billion.
The acquisition fits into its goal of rapid expansion over the next couple years. Once a boutique firm called Genivar, the 60-year-old company has swelled to 49,000 employees from 31,700 at the end of 2014. It aims to eclipse SNC-Lavalin’s 52,000 employees with 65,000 workers by 2021.
WSP shares rose 87 per cent over the past three years, hovering at around $76 this week.
“Expensive? Think again,” said Raymond James analyst Frederic Bastien in a note to investors Thursday before the deal was announced. “It is our belief that in recent times, the misfortunes of other Canadian engineering firms have unreasonably dragged WSP’s stock price.”
The company’s market value sits at $8.18 billion, compared with $3.22 billion for its rival down the street in Montreal, SNC-Lavalin.
SNC, which has seen its market value fall by more than 60 per cent since January amid a political scandal in Ottawa, is on track to slim down its domestic labour force after interim chief executive Ian Edwards announced the company will quit the field of fixed-price construction projects — where the bid winner eats any cost overruns — and pivot to a more stable business model like WSP’s that revolves around engineering services.
WSP’s other acquisitions this year include the Danish Orbicon A/S — a 500-employee environmental consulting firm — last month and, in August, U.S.-based Ecology and Environment Inc., a 775-employee environmental consulting firm it bought for US$65.1 million.
Earlier in 2019 WSP bought U.S.-based health-care engineering firm Leach Wallace Associates Inc., U.K. consultancy Indigo Planning Ltd., French geotechnical company Sepia and Swiss engineering firm Todt, Gmur + Partner AG.
Thanks in part to a string of recent purchases, the company now counts 16,000 people in Europe, including the U.K. and Ireland, said Magnus Meyer, who heads WSP in Europe, in a news release.
“Through this acquisition, we are reinforcing our approach of being a global player with a strong local presence,” he said of the Lievense deal.
WSP shares jumped more than two per cent to $78.15 in early trading Friday before levelling out at $77.59 at midday on the Toronto Stock Exchange.
This report by The Canadian Press was first published Oct. 11, 2019.
Companies in this story: (TSX:WSP, TSX:SNC)
Christopher Reynolds, The Canadian Press