CTI says agreed bid for engineering consultancy is a thumbs up for UK investment

Shares in engineering consultancy Waterman Group nearly doubled in early trading today after it revealed it had agreed a takeover bid by Japan-based CTI Engineering.

CTI, whose recommended 140p-a-share offer currently values Waterman at £43m, said it was a “clear sign” of the Japanese firm’s belief in the UK as a place to do business. The move is its first acquisition outside of its home market.

The listed UK firm’s shares, which closed yesterday at 77p, rocketed to 139p on the news of the bid.

CTI will finance the deal from its existing cash resources.

Michael Baker, Waterman’s chairman, said management believed the business had a “strong independent future”, but said CTI’s bid was nonetheless attractive and reflected the “high quality of the business, its people, market position and future prospects”.

“We believe that the CTI proposal provides considerable opportunities for our people and enhances our capabilities and expertise in several key markets, including highways and flood defence. 

“In particular, the proposal for Waterman to continue to operate as an independent business within the CTI Group is compelling for both our clients and our people.”

Kazuo Murata, president and representative director of CTI, said Waterman would expand his firm’s technical capacity to serve international clients. “Waterman’s knowledge and experience of working with both private and public sector clients in English speaking markets should provide an excellent strategic fit with our group of companies as we seek to take advantage of the opportunities that exist beyond our domestic market.

“Our investment in Waterman is a clear sign of our belief in the UK as a place to do business and its strategic importance in serving international markets. We are also excited about the possibility to build upon Waterman’s foothold in the Australian market and, through its office in Ireland, within Europe,” he added.

The deal is likely to complete by early July.

How the two firms size up

Waterman Group

Revenue: £91.3m
Pre-tax profit: £3.6m


Revenue: JY42.03bn (£288m)
Net income: JY1.45bn (£10m)

All numbers 2016