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WYG rejects takeover offers

9 Jun 15 Stock market listed consulting engineer WYG has pulled down the ‘for sale’ sign and opted to continue on its own. It has also made a minor acquisition.

WYG engaged bankers from Lazard & Co in January to review strategic options, with a view to finding someone to take it over or merge with. [See our previous report here.] Several offers were made, but none were considered to be good enough.

The company now says that this review has concluded that the firm is better off on its own – adding that it knew all along that this was likely to be the best outcome.

It has also acquired FMW Consultancy, a specialist transport and infrastructure consultant founded in 2006 by Richard and Adele White. This is WYG’s fourth bolt-on acquisition in the past two years. FMW made profits of £300,000 from £1.6m turnover in the year to 31st May 2014.

WYG saw its worldwide revenues grow 3% in the year to 31st March 2015, reaching £130.5m (2014: £126.9m). Pre-tax profit fell back 19% to £1.44m (2014: £1.78m).

The home market improved, however, with UK revenues growing 15% to £83.9m. WYG won seven out of the eight major UK frameworks for which it bid last year, including a place on the Ministry of Defence’s principal support provider framework.

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In its annual results statement the WYG explained the conclusions of the strategic review. It said: “The board is pleased to announce that the strategic review initiated on 26th January 2015 is now complete, bringing the formal Takeover Code offer period to an end. As part of the process the board, supported by its financial advisers, undertook a comprehensive review of the broad range of options available to WYG to maximise shareholder value and best position the Company to capitalise on the significant growth potential available to it for the benefit of its clients, employees and shareholders.

“We embarked on this process confident in the strength of our business model and growth strategy, which is focused on a unique combination of asset creation for the natural, social and built environments in mature markets and long-term programme planning for the implementation of international aid funding in developing markets. Furthermore the review tested the scale of the opportunity that is available to the group and has reaffirmed all of these strengths and future opportunities.

“It has always been the view of the board that the most likely outcome would be to confirm that an independent future would provide strong value for all stakeholders.  During the course of the board's review, a number of high level expressions of potential interest were received from various parties, but none which appropriately valued the future prospects of the group or recognised the unique positioning of the group in its chosen markets. The review has therefore confirmed that an appropriately funded independent group represents the best route to optimising value for all stakeholders.”

The company has secured new £25m banking facilities from HSBC for the next five years.

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