Tetra Tech Swoops In With Deal to Purchase British Environmental Agency; Transfer May Set off Bidding Warfare

Pasadena-based engineering and consulting agency Tetra Tech Inc. late final month introduced its largest-ever acquisition: an settlement to purchase a British environmental consulting firm for $691 million. However not so quick.

Tetra Tech faces a possible bidding battle over the British agency, Abingdon-on-Thames-based RPS Group plc. That’s as a result of in early August, Montreal, Quebec-based engineering and consulting big WSP World Inc. introduced that it had reached an settlement to purchase RPS Group for $641 million.

When Tetra Tech’s greater provide got here in, six weeks later, RPS Group’s board rescinded its acceptance of WSP World’s provide and promptly agreed to Tetra Tech’s; RPS and Tetra Tech collectively introduced their settlement late on Sept. 23.

On Sept. 26, WSP World issued an announcement saying it was “contemplating its choices.” The corporate might stroll away or sweeten its provide, which might set off a bidding battle.
On the heart of the looming battle is RPS Group, an environmental and water infrastructure consulting agency based in 1970 that has grown to five,000 staff and annual income of $757 million. Whereas the corporate has about 100 workplaces in 12 nations, its geographic areas of focus are its native United Kingdom, the European Union and Australia.

For Tetra Tech, which has expanded in spurts over the past 20 years, the deal to purchase RPS Group – ought to it maintain up – represents a superb alternative to broaden its water and environmental administration practices in these areas.

“The RPS Group advances our long-term technique to reinforce our place because the premier international high-end consulting and engineering agency centered on water, atmosphere, sustainable infrastructure, and vitality transformation,” Dan Batrack, Tetra Tech’s chief government, mentioned within the Sept. 23 settlement announcement.

If the deal goes by way of, Tetra Tech would in a single day increase to 26,000 staff from its present 21,000. Its income would additionally soar significantly from 2021’s $3.2 billion.
After the RPS Group board accredited Tetra Tech’s provide, RPS Group leaders mentioned within the announcement that Tetra Tech supplied each extra worth for shareholders and a greater match with their very own firm.

“The board of RPS is happy to suggest Tetra Tech’s provide, which gives our shareholders with even better worth for his or her shares,” Ken Lever, RPS’s non-executive chairman, mentioned within the announcement. “Our mixture with Tetra Tech will present engaging alternatives and long-term advantages to our associates and international shoppers.”
John Douglas, RPS Group’s chief government, mentioned the deal will enable RPS Group extra alternatives to attain its imaginative and prescient.

“Tetra Tech gives RPS and its staff with a robust and culturally aligned platform that creates a pre-eminent consulting and engineering agency addressing local weather change and all its results.”

Robust contender

But when WSP World enters the fray with a sweetened provide, it might characterize a formidable opponent for Tetra Tech. The corporate is far bigger than Tetra Tech: 57,000 staff and 2021 income of $8.1 billion. And it has a way more aggressive growth plan: the corporate acknowledged in its 2021 annual report that it intends to double in dimension over the following a number of years. Its acknowledged aim is to grow to be one of many world’s main environmental and infrastructure consulting companies.

WSP has made a number of huge acquisitions in recent times, most notably New York-based Parsons Brinckerhoff in 2014 for $1.3 billion and Toronto, Ontario-based Golder Associates in late 2020 for $1.1 billion.

And simply three months in the past, WSP introduced it had agreed to purchase the environmental and infrastructure enterprise of Aberdeen, Scotland-based John Wooden Group for $1.8 billion; the deal closed on Sept. 21.

Tetra Tech, in the meantime, has pursued a lot smaller offers which are typically strategic in nature and made on a case-by-case foundation.
“WSP has an aggressive repute in M&A, whereas (Tetra Tech)’s is traditionally conservative,” Andrew Wittmann, senior analysis analyst with Milwaukee, Wisconsin-based funding financial institution and analysis agency Baird, mentioned in a Sept. 26 analysis word.
Wittmann mentioned in his word he “gained’t rule out one other provide” from WSP World for RPS Group.

Study different latest information from Tetra Tech on Web page 10.