Building services group WSP has leaped into the top three European consulting engineers with the £72.5m acquisition of a Swedish firm.
WSP said earlier this year that it would buy foreign companies because the UK was too small to sustain its growth.

The purchase of technical consultant Jacobson and Widmark is a significant step for the group, and follows two US acquisitions last year. Overseas turnover has increased from £5m five years ago to more than £120m with the latest deal.

The group said the deal gave it an overall turnover of more than £220m.

But the City's response to the deal was muted, with WSP shares rising 1p to 434.5p after the news and finishing the week 5% lower overall.

Managing director Christopher Cole said the purchase of Jacobson and Widmark would help its growth in Western Europe and serve as a springboard into Eastern Europe, where it is targeting countries such as Poland.

He said: "The acquisition meets the group's ongoing international growth strategy and gives us a brilliant opportunity to further expand in both the European and Eastern European markets."

Cole added that Jacobson and Widmark was a good fit for WSP, giving it a larger client base and expanding the range of skills it could offer.

WSP also said the technical consultant's order book was strong.

WSP plans to raise £58m for the deal by issuing one new share at 350p for every two on the market. Up to 17.5 million new shares will be issued. WSP will use new loans and existing funds to pay the balance.

Jacobson and Widmark's turnover for the year to 31 December 2000 was £81.5m. This is more than double WSP's overseas turnover last year, which stood at £37m.

The Swedish firm, which is listed on the Stockholm stock exchange, reported pre-tax profit of £15m last year.

Last July, WSP bought two US-based high-rise specialists; Flack & Kurtz, a leading building services engineer; and Cantor Seinuk, a structural engineer specialising in tall building design.

Thomas Erseus, Jacobson and Widmark's managing director, is to become a WSP executive director and vice-chairman Jan Akesson will join WSP's board as a non-executive director.