WSP Global Inc. yesterday announced that it has entered into a stock purchase agreement with Balfour Beatty plc in connection with the acquisition of Parsons Brinckerhoff Group Inc., the professional services division of Balfour Beatty, for an enterprise value of US$1,242,500,000 plus an additional consideration for cash retained by Parsons Brinckerhoff of up to US$110 million, subject to certain closing and post-closing adjustments.
The terms of the acquisition have been approved by the boards of directors of both WSP and Balfour Beatty plc. The acquisition, which remains subject to certain customary closing conditions, including approval by the shareholders of Balfour Beatty, approval by certain lenders to Balfour Beatty and receipt of applicable antitrust approvals, is expected to be completed in the fourth quarter of 2014.
Headquartered in New York City, Parsons Brinckerhoff is a global professional services firm with a network of approximately 170 offices and nearly 13,500 employees on five continents. The firm is a premier infrastructure consultancy providing services in transportation, power, energy, community development, water, mining and environment segments.
The U.K.-based company will return up to £200 million ($329 million) of the proceeds to shareholders and put £85 million toward reducing its pension-fund deficit.
WSP Global said that the acquisition is a good platform for growth because:
WSP Global estimates annual cost synergies of approximately US$25 million and expects these synergies to be achieved over a 24-month period with 50% expected to be realized within the first twelve months.
Pierre Shoiry, President and Chief Executive Officer of WSP, said:
"We are pleased to be joining forces with a firm of Parsons Brinckerhoff's long-standing reputation and know-how as we expect this transaction to create an industry leader, with the ability to deliver more expertise and services to our client base across the world. We expect to successfully reach the strategic objectives we had set for 2015, by creating one of the largest global pure-play professional services firms in our industry around our four pillars, namely our employees, our clients, our operational excellence and our expertise. We also anticipate that the employees of both firms will benefit from the transaction, as we integrate our talents and make the most of our greater scale to continue to develop our people, improve their career opportunities and advance their ability to work globally.
On the integration front, building on our past success of combining GENIVAR and WSP, we anticipate a harmonious process which will be led by executives from both firms, with an objective of bringing together the best of both organizations."