US firm tables £636m bid for RPS, trumping summer offer made by Canadian rival
Tetra Tech is set to continue its raid on UK consultants with the firm agreeing to buy RPS Group for more than £600m – trumping a bid from WSP made over the summer.
The California-based business, which was set up in 1966 and has been listed on the US Nasdaq exchange for over 30 years, bought WYG for £54m three years ago and Hoare Lea last summer for an undisclosed sum.
In a Stock Exchange update this morning, RPS, which is based in Oxford and has 5,000 employees, said Tetra Tech had made a “superior proposal” for the business adding: “RPS Directors have withdrawn their recommendation of the WSP Offer. The RPS Directors’ unanimously support and intend to take the relevant actions to implement the [Tetra Tech] Acquisition.”
In August, WSP, which has told investors it is mulling what to do next raising the prospect of a bidding war, said it had agreed to buy RPS for £591m – but the Tetra Tech bid values the firm at £636m.
RPS, which employs consultants, designers, planners, engineers, and technical specialists, was set up in 1970 as Rural Planning Services and was listed 17 years later. It operates across a range of sectors providing specialist services to government and the private sector.
In its last set of results, RPS improved fee revenues 4% last year to £476m and returned to the black with a pre-tax profit of £12.4m from a £31.3m loss last time.
In its latest report and accounts, Tetra Tech said it splashed out $151.7m (£125m) on four acquisitions last year – including the Hoare Lea deal. It said Tetra Tech’s group turnover had improved 7% to $3.2bn (£2.6bn) with profit up 16% to $279m (£231m).