WSP is offering RPS shareholders 206 pence per share; yesterday’s price was 117 pence – RPS directors said it was too good an offer to turn down. Whether it goes ahead now depends on RPS shareholder approval.
Founded in 1970 in Abingdon as Rural Planning Services, RPS is now a diversified professional services firm of approximately 5,000 employees including consultants, designers, planners, engineers, and technical specialists. Listed on the London Stock Exchange, it generated revenue of £560m last year and made a pre-tax profit of £12.4m. In the first half of 2022 it generated revenue of £267.4m and made a pre-tax profit of £11.1m.
WSP in its current form began life in 2012 when the listed UK firm WSP was taken over by Canada’s Genivar. Genivar then dropped its own name for that of WSP. Since then WSP has acquired Parsons Brinkerhoff (from Balfour Beatty), Mouchel (from Kier), Berger Holdings and Golder. It is currently in the process of taking over the environment and infrastructure business of John Wood Group for US$1.8bn, which is expected to complete by the end of next month. Last week it agreed a £60m deal to buy Capita has agreed to sell its property and infrastructure consultancy businesses.
RPS chairman Ken Lever said: "The RPS directors believe that RPS has a clear strategy and is strongly positioned for the future, underpinned by favourable trends in its end markets and the benefits that are starting to flow from investments in RPS' talent programme, brand, marketing strategy and technology initiatives.
“However, this is a compelling offer from WSP which fully values the business and its future prospects. It represents a highly attractive premium to recent trading levels and provides certain value in cash today for RPS shareholders. The RPS directors also believe that the acquisition will provide career opportunities for our employees within the enlarged WSP group as well as access to a comprehensive and expanded service offering for our clients."
Alexandre L'Heureux, president and chief executive of WSP Global, said: "Combining the capabilities of the RPS Group and the WSP Group is strategically compelling and will allow us to leverage our collective know-how and provide a broader range of complementary services to our clients while building a world-class ESG advisory business. We are looking forward to welcoming the RPS Group's talented employees and believe they will benefit from the expanded career and development opportunities this acquisition will bring the employees of both firms."
The enterprise value of £625.9m includes £591.1m of equity plus net debt of £34.8m to be taken on by WSP.
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