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(Bloomberg) — Canada’s WSP Global Inc. reached a deal to buy a US engineering firm from Warburg Pincus LLC with the financial backing of its largest shareholder, Quebec’s public pension fund.
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WSP will pay $3.3 billion in cash for Windsor, Connecticut-based TRC Companies Inc., which sells engineering and consulting services to electrical utilities, energy firms and other customers, according to a statement Monday. The Montreal-based company said the transaction would position it as the largest engineering and design firm in the US, building on a series of earlier acquisitions.
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It’s the latest in a string of deals that has turned WSP from a little-known midcap Canadian engineering company into a sprawling entity with more than 200 offices in the US and locations in dozens of countries including China, the United Arab Emirates and Germany.
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“We don’t believe in growth for growth’s sake. We do it because our clients demand it,” WSP Chief Executive Officer Alexandre L’Heureux said at an event in Montreal last month. “Our clients are asking for more services, so we will seek out this technical expertise both organically and inorganically.”
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To pay for it, the Canadian firm plans to sell about C$850 million ($617 million) in shares, with C$118 million coming from the Caisse de Depot et Placement du Quebec, which would own about 14% of the company.
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Canadian Imperial Bank of Commerce and JPMorgan Chase & Co. have committed to the debt financing for the acquisition, WSP said.
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TRC had $1.5 billion of revenue and $192 million of adjusted earnings before interest, taxes, depreciation and amortization for the year ended June 30. The deal will be accretive to WSP’s adjusted earnings per share before any cost-cutting, according to the company.
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Warburg bought TRC from New Mountain Capital in a deal announced in October 2021. At the time, the engineering firm said it had just fewer than 6,000 employees. Now it has about 8,000 staff, according to Monday’s statement.
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(Updates with additional information on the deal, beginning in the second paragraph.)
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