1 Jun 2022
John Wood agrees to sell Built Environment Consulting to WSP Global for USD 1.9bn
On June 1, 2022, WSP Global Inc. acquired the Environment & Infrastructure (E&I) division of John Wood Group plc for a total cash consideration of CAD 2.4 billion (US$1.810 billion), which includes the net present value of CAD 274 billion (US$200 million) from a tax benefit, leading to a net transaction value of CAD 2.20 billio (US$1.61 billion). This acquisition, reflecting a multiple of 14.6 times E&I's projected 2022 EBITDA and 11.5 times post-synergy, is in line with WSP's strategic growth plans and expected to double their Earth & Environment team size in the U.S.
The transaction is expected to be immediately accretive to WSP’s adjusted earnings per share, with a further increase to mid-teen accretion by 2024 after realizing the synergies. Annual cost synergies of about CAD 41 million (US$30 million) are anticipated, with half expected to be achieved within the first year. The acquisition will be financed via a new CAD 2.48 billion (US$1.81 billion) term credit facility arranged by Canadian Imperial Bank of Commerce, keeping WSP’s pro forma net debt to EBITDA ratio at approximately 2.0x.
Completion is anticipated in the fourth quarter of 2022, subject to shareholder approval, a reorganization of Wood's E&I business, and regulatory approvals. Perella Weinberg Partners LP served as the exclusive financial advisor to WSP, with legal advice provided by Linklaters LLP in the UK, Stikeman Elliott LLP in Canada, and Skadden, Arps, Slate, Meagher & Flom LLP in the U.S.
