Chris Cole says engineer will leverage financial “firepower” of Canadian consultant Genivar
WSP will target expansion through acquisitions by leveraging the financial clout of its new Canadian parent company, following the proposed £278m takeover by Genivar announced this morning.
WSP chief executive Chris Cole, set to be executive chairman of the merged company, said the firm would primarily seek acquisition targets in the US and Australia.
Speaking exclusively to Building, he said WSP would leverage Genivar’s market value to make further acquisitions. “We’ll be looking for acquisitions again because we have the firepower again,” he said.
Despite being less than two-thirds the size of WSP in terms of staff numbers and turnover, the professional services firm had, as of yesterday, a market value of £516m, more than three times that of WSP, valued at just £166m.
He described the tie-up as a “unique opportunity” to merge with a consultant in a “very strong economy”.
If completed the deal will see Genivar pay £278m to buy the entire issued share capital of WSP, with the combined group to be renamed WSP Genivar “as soon as practical following completion of the merger.” The deal will see the combined firm listed on the Toronto stock exchange, with current WSP chief executive Chris Cole given the role of executive chairman and current Genivar chief executive officer Pierre Shoiry keeping the chief executive role.
The existing executive directors of WSP Paul Dollin, Rikard Appelgren and Stuart McLachlan will remain in their roles.
Cole said Genivar acquired WSP for its global footprint and was committed to fuelling further expansion. He dismissed reports WSP’s shareholders had been pressuring for a sale.
Cole said: “I’ve always believed in consolidation and we’ve been waiting for the right deal. I’ve been consistent.”
Cole said the UK-based engineer “didn’t open the door to anyone else” and had been talking to Genivar about a deal for six months and seriously for three months.
WSP took the view that large scale expansion could only be achieved through a major M&A deal, Cole said.
He said: “We looked at how long it would take in the current climate to expand [to this size after the Genivar deal] and it was potentially quite a long time.
“We looked at the economy in the corporate world – and the uncertainty in the Euro market – and we didn’t see that improving.”
Cole said there were “very few [M&A] opportunities out there that would be so complementary” as there was “no geographical overlap whatsoever” between WSP and Genivar.
WSP has 9,000 staff spread across 30 countries, whereas Genivar’s 5,500 staff work primarily in its domestic Canadian market.
Cole said the strength of the Canadian market had made the deal “very attractive” and added that WSP would be able to leverage the firm’s expertise – particularly in the booming oil and gas sectors – in other markets around the world.