Montreal-based engineering and professional services firm WSP Global Inc. has announced its intention to acquire Power Engineers Inc., a leading power sector design firm based in Hailey, Idaho. The transaction, valued at $1.78 billion, is expected to close in the fourth quarter of 2024.
Strategic Benefits
According to Alexandre L’Heureux, President and CEO of WSP, the acquisition will provide significant strategic benefits. “By uniting WSP’s extensive global network with Power’s deep technical expertise, we are poised to provide exceptional solutions and service quality,” L’Heureux stated. The merger aims to enhance WSP's capability to help clients and communities adapt to the changing energy landscape.
Company Profiles
WSP Global Inc., ranked No. 4 on ENR's Top 150 Global Design Firms, reported a 2023 revenue of $8.28 billion, with approximately 9% of this derived from the power sector. Its New York City-based unit, WSP USA, is ranked No. 5 on ENR’s Top 500 Design Firms, with power sector work contributing 12% of its domestic revenue.
Power Engineers Inc., ranked No. 26 on the Top 500, reported $864.4 million in revenue for 2023. The firm employs around 4,000 people and serves major investor-owned utilities. Power Engineers is also involved in engineering projects for the food and beverage and semiconductor industries, with an international project footprint.
Leadership and Integration
Following the acquisition, Holger Peller, President and COO of Power Engineers, will lead WSP’s global power and energy business under the Power brand. Jim Haynes, the current CEO of Power Engineers, will transition to an advisory role within WSP.
Financial Details
WSP plans to finance the acquisition through new term loans and a stock sale, raising approximately $730 million. The all-cash deal reflects Power Engineers’ need for an infusion of capital to sustain growth amidst shareholder exits. Power Engineers had also considered an initial public offering and equity firm ownership before agreeing to the sale.
Employee Considerations
WSP has pledged to retain Power Engineers’ employees and has incorporated terms to prevent layoffs. However, there are concerns about the integration of Power Engineers’ 4,000 employees into WSP’s larger, publicly held structure. Approximately 80% of Power Engineers’ employees are not shareholders, raising questions about the retention of the Power Engineers brand and the impact of anticipated cost synergies of $25 million.
Regulatory and Shareholder Approval
The acquisition is pending approval from Power Engineers' shareholders and regulatory authorities. A special meeting for shareholders is expected by September 6, with 83% of Power shares already committed to supporting the deal. The transaction is projected to be highly beneficial for WSP, though it may present challenges for Power Engineers' employees.
By James Leggate and Debra K. Rubin