Canadian engineer WSP plans to acquire British environmental and consulting engineer Ricardo for around US$489m.
The 430-pence-per-share price is equivalent to 10.4 times Ricardo’s 2024 pre-IFRS 16 underlying EBITDA (earnings before interest, taxes, depreciation and amortisation), WSP said.
Ricardo was founded in 1915 in Sussex, England by Sir Harry Ricardo, an engineer who contributed to the development of the internal combustion engine.
The company has grown to 2,700 staff in Europe, Australia, North America, Asia and the Middle East.
WSP said a strategic review of the business would likely lead to the sale of Ricardo’s automotive, industrial and performance products businesses, potentially affecting 1,000 employees.
That would leave WSP with Ricardo’s rail, air quality, water management, energy resilience, policy strategy, and advisory services portfolio.
WSP says the acquisition will boost its business in the UK, Australia and the Netherlands.
Reuters reports that Ricardo had this year been under pressure from 20% shareholder, Science Group, to sell or break up its business and to remove its chairman Mark Clare, claiming structural issues and underperformance.
Alexandre L’Heureux, WSP’s president, said the acquisition “perfectly aligns with WSP’s vision for sustainable, compounding growth”.
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