RPS backs GBP591 million takeover offer from consultant WSP Global

(Alliance News) - RPS Group PLC on Tuesday said it has agreed to be bought out by Toronto-listed ...

Alliance News 9 August, 2022 | 8:23AM
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(Alliance News) - RPS Group PLC on Tuesday said it has agreed to be bought out by Toronto-listed consultancy firm WSP Global Inc in a deal worth just over GBP590 million.

WSP will buy RPS for 206 pence per share, in cash. The deal values the professional services firm at GBP591.1 million. The RPS board backed the deal.

RPS shares jumped 74% to 203.48p each in London on Tuesday morning, giving it a market capitalisation of GBP564.7 million.

WSP Global closed up 0.7% at CAD157.58 in Toronto on Monday, valuing it at CAD18.70 billion, about GBP12.02 billion.

WSP provides engineering consulting services in the energy, maritime, infrastructure and rail and transport spaces. RPS works in fields including health and safety, exploration and development, planning and approvals and communications.

RPS Chair Ken Lever commented: "The RPS directors believe that RPS has a clear strategy and is strongly positioned for the future, underpinned by favourable trends in its end markets and the benefits that are starting to flow from investments in RPS' talent programme, brand, marketing strategy and technology initiatives.

"However, this is a compelling offer from WSP which fully values the business and its future prospects. It represents a highly attractive premium to recent trading levels and provides certain value in cash today for RPS shareholders. The RPS directors also believe that the acquisition will provide career opportunities for our employees within the enlarged WSP group as well as access to a comprehensive and expanded service offering for our clients."

WSP Chief Executive Alexandre L'Heureux added: "Combining the capabilities of the RPS Group and the WSP Group is strategically compelling and will allow us to leverage our collective know-how and provide a broader range of complementary services to our clients while building a world-class ESG advisory business. We are looking forward to welcoming the RPS Group's talented employees and believe they will benefit from the expanded career and development opportunities this acquisition will bring the employees of both firms."

In addition, RPS reported first-half results.

Revenue in the six months ended June 30 climbed 18% to GBP319.5 million from GBP271.8 million. Its pretax profit increased 56% to GBP11.1 million from GBP7.1 million.

RPS lifted its payout to 0.45p per share from 0.26p.

"The good momentum achieved in 2021 has continued into H1 2022 and RPS is a stronger more resilient business, and the outlook remains positive," the firm said.

"The group's contracted order book at 30 June 2022 was up 15% on June 2021 and up 8% on December 2021. It continues to be supported by the very positive market trends in urbanisation, natural resources, and sustainability and there remain significant growth opportunities in our areas of focus - including offshore wind, project management, flooding and pollution management, transport infrastructure and sustainability."

By Eric Cunha; ericcunha@alliancenews.com

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