Tetra Tech to take over environmental consulting company RPS Group

Tetra Tech Inc looks to have won the battle for environmental and social engagement consulting specialist, RPS Group plc, after the boards of both companies reached agreement on the terms of a recommended cash acquisition whereby a Tetra Tech subsidiary will acquire RPS.

The £2.22/share ($2.39/share), all-cash acquisition price trumps the £2.06/share price WSP offered back in August and also represents a 109.5% increase on the volume-weighted average price of £1.06/share for the 90-day period ended August 8, 2022.

The combined Tetra Tech and RPS will represent a premier international consulting, engineering and program management firm, and will leave RPS well-positioned to provide a strong platform to drive long-term growth within the broader enlarged group, Tetra Tech said. The acquisition is also expected to be mid- to high-teen percent accretive to Tetra Tech’s adjusted earnings per share after realising the full benefit from an estimated £21 million in cost synergies and integration into Tetra Tech.

On August 8, 2022, the boards of WSP Global, WSP Holdings and RPS announced that they had reached agreement on the terms of a recommended cash offer pursuant to which WSP Holdings, or another wholly-owned subsidiary of WSP Global, would acquire the entire issued and to be issued share capital of RPS. However, Tetra Tech’s new proposal has now been deemed superior by the RPS Directors and advisors.

As at the date of this announcement, Tetra Tech has received irrevocable undertakings and letters of intent accounting for approximately 27.53% of RPS’ issued share capital.

Tetra Tech is a global consulting and engineering firm, which provides high-end services for projects worldwide in multiple sectors including mining.

RPS, meanwhile, says it solves problems that matter in a complex, urbanising, resource-scarce world and concentrates its expertise on the parts of project lifecycles that have the biggest impact on project outcomes, with a strong sustainability agenda.

John Douglas, Chief Executive of RPS, said: “Joining Tetra Tech represents a highly attractive combination of two leading companies in the industry for our clients and provides an ideal opportunity for our people to realise RPS’ goals to meaningfully contribute to the world’s most challenging problems in energy transformation and water management around the world. I am very excited about the future of our combined company and the benefits for our people and clients.”

Dan Batrack, Tetra Tech Inc Chairman and CEO, added: “The RPS Group advances our long-term strategy to enhance our position as the premier global high-end consultancy in water, environment, sustainable infrastructure and energy transformation. We welcome the RPS Group’s associates to join us and collectively leverage our long-term client relationships and project experience. As a global consultancy with a commitment to high-end solutions, we can offer our expanded team of associates even greater professional opportunities.”