- Advances Tetra Tech’s Global High-End Consultancy in Water,
Environment, and Sustainable Infrastructure
- Expands Global Leadership in Energy Transformation,
Environmental Management, and Data Analytics
- Strengthens United Kingdom and Australia Operations and
Establishes European Union Practice
- RPS Group plc Board unanimously recommends Tetra Tech's bid
of 222 pence per share
Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end
consulting and engineering services, is pleased to announce that it
has reached an agreement with RPS Group plc (“RPS Group”) on the
terms of an all-cash acquisition of RPS Group for 222 pence per
share (the “Acquisition”). The Acquisition has been unanimously
recommended by the Board of Directors of RPS Group.
The combined 26,000 associates of the RPS Group and Tetra Tech
will establish a premier global consultancy in water, environment,
sustainable infrastructure, and energy transformation. The RPS
Group employs 5,000 associates in Europe, the United Kingdom, Asia
Pacific, and North America, delivering high-end solutions
especially in energy transformation, water, and program management
for government and commercial clients. Tetra Tech is a global
high-end consultancy with #1 rankings in both water and
environmental management as published in Engineering News-Record.
Its 21,000 associates are technical experts in delivering more than
70,000 projects per year around the world.
The RPS Group significantly expands Tetra Tech’s water practice
in the United Kingdom, and enhances Tetra Tech’s leading position
in renewable energy and environmental management. The combination
further strengthens our geographic presence in the United Kingdom,
European Union, and Australia. The RPS Group and Tetra Tech are
culturally aligned and together will use a Leading with Science®
approach to address critical issues such as climate change,
resiliency, and energy transformation. The combination of the RPS
Group and Tetra Tech also advances both companies’ strategies to
provide high-end consulting with an emphasis on advanced data
analytics and unique software applications, such as those in water
management, ocean analytics and contaminant modeling.
“The RPS Group advances our long-term strategy to enhance our
position as the premier global high-end consulting and engineering
firm focused on water, environment, sustainable infrastructure, and
energy transformation.” said Dan Batrack, Tetra Tech Chairman and
CEO. “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.”
Ken Lever, Non-Executive Chairman of RPS commented, “The Board
of RPS is pleased to recommend Tetra Tech’s offer, which provides
our shareholders with even greater value for their shares. Our
combination with Tetra Tech will provide attractive opportunities
and long-term benefits to our associates and global clients.”
Furthermore, John Douglas, Chief Executive of RPS explained,
“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 realize 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. By joining together, Tetra
Tech provides RPS and its employees with a strong and culturally
aligned platform that creates a pre-eminent consulting and
engineering firm addressing climate change and all its
effects.”
The Transaction
It is intended that the Acquisition will be implemented by means
of a Court-sanctioned scheme of arrangement (the “Scheme”) under
Part 26 of the U.K. Companies Act 2006. The purpose of the Scheme
is to provide for Tetra Tech to indirectly become the owner of the
entire issued and to be issued share capital of RPS Group.
Details of the proposed Acquisition will be sent to RPS Group
shareholders within 28 days of the date of this announcement
(unless the Panel on Takeovers and Mergers under the U.K. City Code
on Takeovers and Mergers agrees otherwise). Subject, amongst other
things, to the satisfaction or waiver of the conditions, the
approval of the Scheme by the RPS Group shareholders, the receipt
of applicable regulatory approvals and the Court’s sanction of the
scheme of arrangement, it is expected that the Acquisition will
complete by the end of 2022.
For further details regarding the proposed Acquisition, readers
are referred to the firm offer announcement in respect of the
Acquisition (the “Announcement”) previously released in the United
Kingdom on the date hereof in accordance with Rule 2.7 of the UK
City Code on Takeovers and Mergers and which can be found on Tetra
Tech’s website at tetratech.com/investor-offer. The Announcement
and other important documents (including, among others, the New
Credit Facility (as defined below)) are also attached as exhibits
to Tetra Tech’s Current Report on Form 8-K filed with the SEC
concurrently with this release. Please note that this release is
not a summary of the Announcement and should not be regarded as a
substitute for reading the Announcement. We therefore strongly
encourage you to read the Announcement in full in connection with
this release, which is subject to the full text of the Announcement
in all respects.
The Acquisition is expected to be mid to high teen percent
accretive to adjusted earnings per share (EPS) after realizing the
full benefit from an expected £21 million in cost synergies and
integration into Tetra Tech. The cost to realize these synergies is
estimated to be £16 million and would be substantially incurred in
first twelve months after closing. Adjusted EPS excludes one-time
transaction related costs and intangible amortization.
All relevant documentation will be made available on Tetra
Tech’s website at tetratech.com/investor-offer.
Acquisition Financing
Concurrently with the announcement of the Acquisition, Tetra
Tech has obtained a “certain funds” of £714 million (approximately
800 million USD) plus 350 million USD New Credit Facility, which
includes commitments for the full amount of the purchase price for
the Acquisition value of the entire issued and to be issued share
capital of RPS. Bank of America, N.A. is acting as administrative
agent and sole lender with respect to the New Credit Facility.
The New Credit Facility is designed to ensure compliance with
the “certain funds” requirements from announcement of the
Acquisition under the UK City Code on Takeovers and Mergers.
Further, the Acquisition financing plan has been designed and
structured with a view to preserving Tetra Tech’s credit
profile.
The New Credit Facility contains representations, warranties,
conditions precedent, covenants, a leverage ratio and events of
default that are customary for a transaction of this nature.
Approvals and
Recommendation
The Board of Directors of RPS Group has unanimously recommended
the Acquisition.
Tetra Tech has also received undertakings and letters of intent
from certain RPS Group major shareholders to vote for the
transaction at the RPS Group shareholder meetings to be convened in
connection with the Scheme, in respect of a total number of RPS
Group shares representing in the aggregate approximately 28% of the
existing issued share capital of RPS Group on September 23,
2022.
Financial and Legal
Advisors
BofA Securities is acting as financial advisor to Tetra Tech on
the Acquisition. Legal advice is being provided to Tetra Tech by
Hogan Lovells International LLP.
About RPS Group
RPS Group is a public limited company registered in England and
Wales. RPS Group’s shares are listed on the Official List of the
London Stock Exchange. Founded in 1970 and built on a legacy of
environmental and social engagement, RPS Group is a diversified and
well recognized global professional services firm of approximately
5,000 talented employees.
As an established technology enabled consultancy that operates
across a range of sectors, RPS Group provides specialist services
to government and private sector clients with a focus on front-end
consulting. RPS Group creates shared value for all stakeholders by
solving problems that matter in a complex, urbanizing,
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. RPS Group has been
widely recognized in this respect, having been ranked number one in
the UK for climate change and energy consulting by the Environment
Analysis for 2019/2020, a top 200 environmental firm by Engineering
News-Record in 2021 and recognized in 2021 as one of the first
“carbon champions” by the Institution of Civil Engineers.
RPS Group operates across approximately 100 offices in 12
countries, with more than 99% of its net revenue during the 2021
financial year generated from its operations in OECD countries. The
majority of its net revenue during the 2021 financial year was
generated from its operations in the United Kingdom, Australia and
the United States.
About Tetra Tech
Tetra Tech is a leading provider of high-end consulting and
engineering services for projects worldwide. With 21,000 associates
working together, Tetra Tech provides clear solutions to complex
problems in water, environment, sustainable infrastructure,
renewable energy, and international development. We are Leading
with Science® to provide sustainable and resilient solutions for
our clients. For more information about Tetra Tech, please visit
tetratech.com or follow us on LinkedIn, Twitter, and Facebook.
Any statements made in this release that are not based on
historical fact are forward-looking statements. Any forward-looking
statements made in this release represent management’s best
judgment as to what may occur in the future. However, Tetra Tech’s
actual outcome and results are not guaranteed and are subject to
certain risks, uncertainties and assumptions ("Future Factors"),
and may differ materially from what is expressed. For a description
of Future Factors that could cause actual results to differ
materially from such forward-looking statements, see the discussion
under the section "Risk Factors" included in Tetra Tech’s Form 10-K
and Form 10-Q filings with the U.S. Securities and Exchange
Commission.
Except as required by applicable law or regulation, Tetra Tech
expressly disclaims any obligation or undertaking to publish any
updates or revisions to any forward-looking statements contained in
this Announcement to reflect any changes in Tetra Tech's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
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version on businesswire.com: https://www.businesswire.com/news/home/20220923005517/en/
Jim Wu, Investor Relations Charlie MacPherson, Media &
Public Relations (626) 470-2844
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