WSP to Acquire Louis Berger, a US-based International Professional Services Firm

HIGHLIGHTS

  • Adds 5,000 people to WSP’s workforce, predominantly strengthening our United States footprint, while broadening WSP’s presence in Continental Europe (mainly Spain and France), Middle East and Latin America.
  • Purchase price of US$400 million to be financed by an underwritten term loan.
  • Generates approximately US$480 million in annual net revenues and US$45 million in normalized EBITDA.
  • Significantly adds to WSP’s US Transportation & Infrastructure (including ports and marine) and Environment & Water sectors (including emergency management), while reinforcing our presence in the Federal US market.
  • Complements WSP’s design and project management practices with extensive expertise in Master Planning.
  • Approximately US$15 million recurring cost synergies expected to be delivered within a year after the closing date.
  • Management expects the Acquisition to be mid-single digit accretive to WSP’s adjusted net earnings per share before amortization of intangibles, without considering any synergies.
  • Pro forma net debt to adjusted EBITDA of WSP is expected to be approximately 1.9x at the closing of the Acquisition, in line with our target range.
  • WSP expects to incur approximately US$50 million in one-time integration and restructuring costs.

MONTREAL, July 30, 2018 (GLOBE NEWSWIRE) — WSP Global Inc. (TSX:WSP) (“WSP” or the “Corporation”), is pleased to announce that it has entered into an agreement (the “Acquisition Agreement”) in connection with the acquisition (the “Acquisition”) of Berger Group Holdings, Inc. (“Louis Berger”), the parent company of the group of companies doing business under the umbrella name of Louis Berger, a US-headquartered leading international professional services firm mainly active in the Transportation & Infrastructure and Environmental & Water sectors, as well as in Master Planning.  The purchase price of US$400 million (the “Purchase Price”) will be financed by an underwritten term loan from Canadian Imperial Bank of Commerce (“CIBC”), as sole lead arranger and sole bookrunner.

Louis Berger has approximately 5,000 employees, predominantly in offices across the United States, with an additional presence across Continental Europe, the Middle East, Africa, Asia (mainly India) and Latin America. With its US operations representing approximately 70% of its 2018 net revenues (excluding disaster response revenues), Louis Berger’s portfolio includes some of the most iconic landmarks in the United States, such as the Lincoln Memorial Reflecting Pool, the Statue of Liberty, the George Washington Bridge and the World Trade Center and most recently has been providing emergency management services for temporary power in Puerto Rico since Hurricane Maria. It was also selected, as part of a joint venture, to provide project management services to build Doha’s first metro and supervise construction of three World Cup stadiums ahead of the FIFA 2022 World Cup.

In connection with the US compliance DOJ monitorship of its international divisions instituted in 2015 (which monitorship has been terminated), Louis Berger had undertaken the restructuring of its international operations. WSP intends to pursue this restructuring and expects to incur approximately US$50 million in one-time integration and restructuring costs in the coming years.

“We are pleased by the opportunity to have Louis Berger join WSP. The company is recognized for its expertise in sectors and services that WSP had targeted for growth, including water, environment (including emergency management) and transportation (including ports and marine), as well as master planning. This acquisition will also enable us to increase our presence in geographies we have previously targeted for growth, such as Continental Europe. Lastly, it will increase our exposure to the US Federal sector since Louis Berger has developed expertise and built experience in governmental contracts (including federal military and economic and institutional development),” said Alexandre L’Heureux, President and Chief Executive Officer of WSP. “We will focus on integrating US operations and other regions that have proven to be drivers of growth, while pursuing the international restructuring Louis Berger had started.”

Also commenting on the Acquisition, Jim Stamatis, Chief Executive Officer of Louis Berger, said: “I am very pleased about the prospect of joining WSP, as our values and strategies are aligned and our operations are complementary. This will create new opportunities for our employees and clients. WSP and Louis Berger are known to each other as we have pursued and won many projects together and as a result, we feel very comfortable in the strategic and cultural fit as we join together. As we have just completed our monitorship with the US Government, our most successful year in the company’s history, and continued simplification and restructuring of our operations, this presented an optimal time for us to transition to a new chapter in our evolution.”

The Acquisition, which is expected to be completed in the fourth quarter of 2018, is subject to customary closing conditions, including regulatory approvals and the completion of certain administrative actions following the termination of the compliance monitorship.

CIBC is acting as financial adviser to WSP on the Acquisition.

ABOUT LOUIS BERGER
Founded in 1953, Louis Berger is an Engineering News-Record top-20 ranked, global professional services corporation. With approximately 5,000 engineers, economists, scientists and planners around the globe, it has built decades-long client relationships with local, state and federal governments; multilateral institutions; and other public and private entities.

ABOUT WSP
As one of the world’s leading professional services firms, WSP provides technical expertise and strategic advice to clients in the Transportation & Infrastructure, Property & Buildings, Environment, Industry, Resources (including Mining and Oil & Gas) and & Energy sectors, as well as offering project and program delivery and advisory services. Our experts include engineers, advisors, technicians, scientists, architects, planners, surveyors and environmental specialists, as well as other design, program and construction management professionals. With approximately 43,000 talented people in 550 offices across 40 countries, we are uniquely positioned to deliver successful and sustainable projects, wherever our clients need us. www.wsp.com

NON-IFRS MEASURES
The Corporation reports its financial results in accordance with IFRS.  However, the following non-IFRS measures are used by the Corporation: net revenues; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted EBITDA before Global Corporate costs; adjusted EBITDA margin before Global Corporate costs; adjusted net earnings; adjusted net earnings per share; adjusted net earnings excluding amortization of intangible assets related to acquisitions; adjusted net earnings excluding amortization of intangible assets related to acquisitions per share; acquisition and integration costs; backlog; funds from operations; funds from operations per share; free cash flow; free cash flow per share; days sales outstanding (or DSO) and net debt to adjusted EBITDA.  Additional details for these non-IFRS measures can be found in WSP’s MD&A, which is posted on WSP’s website at www.wsp.com, and filed with SEDAR at www.sedar.com.

Management believes that these non-IFRS measures provide useful information to investors regarding the Corporation’s financial condition and results of operations as they provide key metrics of its performance.  These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS and may differ from similar computations as reported by other issuers, and accordingly may not be comparable.  These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.

FORWARD-LOOKING STATEMENTS
Certain information regarding WSP contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact, including those regarding the proposed acquisition of Louis Berger and the expected impact of the Acquisition on WSP’S strategic and operational plans and financial results, as well as the fact that closing of the Acquisition is conditioned on certain events occurring, and the receipt of all necessary regulatory approvals. Although WSP believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. WSP’s forward-looking statements are expressly qualified in their entirety by this cautionary statement. The complete version of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect WSP’s actual or projected results are included in the Management’s Discussion and Analysis for the year ended December 31, 2017, which is available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and WSP does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

Isabelle Adjahi
Senior Vice President, Investor Relations and Communications
WSP Global Inc.
Tel: (438) 843-7548
isabelle.adjahi@wsp.com