(Reuters) – Montréal-based WSP Global Inc (WSP.TO) said it would buy Balfour Beatty Plc‘s (BALF.L) U.S. professional services division, Parsons Brinckerhoff, for an enterprise value of about US$1.24 billion, to increase its footprint in the U.S. transportation segment.
The deal also will help WSP expand in the United Kingdom and give it a stronger presence in key growth regions such as Asia and Australia, the company said.
The deal is being financed through a combination of a US$502 million bought deal public offering, US$400 million in private placement and new credit facilities, WSP Global said.
In a bought deal, underwriters commit to purchase the entire offering from a client and then resell it.
WSP Global has entered into an agreement with CIBC and Raymond James, on behalf of a syndicate of underwriters, to finance part of the deal.
The deal includes an additional consideration for cash retained by Parsons Brinckerhoff of up to US$110 million, WSP said.
Private placement funding for the deal is being provided by long-time WSP investors the Caisse de dépôt et placement du Québec and Canada Pension Plan Investment Board (CPPIB).
The Caisse and CPPIB have backed several of the professional services company’s previous acquisitions. For example, in April, they helped fund WSP’s $366 million purchase of Focus Corp, a Calgary-based provider of engineering and geomatics services to the oil and gas industry.
WSP expects the Parsons Brinckerhoff deal to close in the fourth quarter and result in cost savings of about US$25 million a year over two years.
Barclays and CIBC are acting as financial advisers to WSP. Stikeman Elliott LLP is the company’s legal adviser. Hogan Lovells LLP is providing legal advice to WSP with respect to U.S. law.
WSP’s shares closed at $36.95 on the Toronto Stock Exchange on Wednesday.
(Reporting by Sneha Banerjee in Bangalore; Editing by Simon Jennings)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Parsons Brinckerhoff