WSP WSP Global Inc

WSP Global Inc. (TSX:WSP) (“WSP” or the “Corporation”) is pleased to announce that it has entered into a definitive agreement (the “Agreement”) to acquire the Environment & Infrastructure business (“E&I”) of John Wood Group plc (“Wood”) for aggregate cash consideration of US$1.810 billion (the “Acquisition”), including the net present value of US$200 million derived from a transaction related tax benefit. The net transaction value of US$1.61B represents 14.6x E&I’s estimated 2022 pre-IFRS 16 adjusted EBITDA1,3 or 11.5x post-synergies.

“The acquisition of Wood’s E&I business will directly contribute to the realization of the ambitions we set out in our 2022-2024 Global Strategic Action Plan. WSP’s leading Global Earth & Environment Consultancy will now have approximately 20,000 experts globally with increased capabilities and reach, including key expertise in the high growth water sector and an expanded offering to Federal and government clients,” commented Alexandre L’Heureux, President and Chief Executive Officer of WSP. “Our platform will be increasingly diversified and resilient, with increased scale in geographies which we have identified for growth such as the United States, where our E&E team will double in size. We look forward to having the team from E&I join us as we expand our leadership in Earth & Environment together,” he added.

“Throughout this process, I’ve been impressed with WSP’s growth story, excellent capabilities, focus on clients and the future aspirations for its business,” said Joe Sczurko, Executive President, Environment & Infrastructure Consulting. “I’m incredibly proud of what our team has accomplished to get here, and I look forward to the new opportunities that will be created for our employees and clients by joining WSP.”

FINANCIAL HIGHLIGHTS

• Acquisition of E&I for a total cash consideration of US$1.81 billion (approximately C$2.31 billion) including the net present value of a US$200 million transaction-related tax benefit. The net transaction value of US$1.61B (Approximately C$2.04 billion) represents 14.6x E&I’s estimated 2022 pre-IFRS 16 EBITDA1,3 or 11.5x post-synergies.
• Immediately accretive to WSP’s adjusted earnings per share , and 2024 accretion increasing to mid-teens once synergies are fully realized3.
• Expected annual cost synergies of approximately US$30 million (approximately C$38 million) expected to be achieved over a 24-month period, with 50% to be realized within the first twelve months after the closing date. Costs required to realize such annual cost synergies estimated not to exceed US$30 million (approximately C$38 million) in the aggregate3.
• Transaction to be financed with a new US$1.81 billion (approximately C$2.31 billion) fully committed term credit facility, expected to result in an estimated 2.0x pro forma net debt to adjusted EBITDA ratio1,3 upon closing, remaining within WSP’s targeted leverage range of 1.0x to 2.0x.
• Acquisition expected to be completed in the fourth quarter of 2022.

ACQUISITION FINANCINGThe Acquisition is to be funded by a new fully committed US$1.81 billion term credit facility with various tenors of up to 5 years in length. Canadian Imperial Bank of Commerce is acting as sole bookrunner with respect to the bank financing. This new term credit facility allows WSP to maintain its current liquidity, while keeping pro forma net debt to adjusted EBITDA ratio at an estimated 2.0x3.

CONDITIONS TO THE ACQUISITIONClosing of the Acquisition is subject to certain customary closing conditions, including (i) the approval of Wood’s shareholders, (ii) completion by Wood of a group reorganization to achieve separation of the E&I business, and (iii) applicable regulatory conditions. The Acquisition is expected to be completed in the fourth quarter of 2022.

FINANCIAL AND LEGAL ADVISORSPerella Weinberg Partners LP is acting as exclusive financial advisor to WSP on the transaction. Legal advice is being provided to WSP by Linklaters LLP in the United Kingdom, Stikeman Elliott LLP in Canada, and Skadden, Arps, Slate, Meagher & Flom LLP in the United States.

CONFERENCE CALLWSP will host a conference call to discuss the Acquisition today, June 1, 2022, at 8:00 a.m. (Eastern Standard Time). To participate in the conference call, dial (409) 216-6433 or (855) 385-1271 (toll free). A live webcast of the conference call will also be available at www.wsp.com/investors. For those unable to attend, a replay will be available within 24 hours following the call.

Non-IFRS measures. Please refer to the "non-IFRS measures" disclaimer below.

2 Non-IFRS measures. These measures are defined in section 19, “Glossary of segment reporting measures”, non-IFRS and other financial measures of the Corporation's Management's Discussion & Analysis for the three-month period ended April 2, 2022. Please refer to "non-IFRS measures" disclaimer below.

3 Please refer to the “forward-looking statements” disclaimer below.

4 Estimate based on twelve-month period ending December 31, 2022.

5 Pro Forma with E&I based on twelve-month period ended December 31, 2021.

ABOUT WSPAs one of the world’s leading professional services firms, WSP exists to future-proof our cities and environment. We provide strategic advisory, engineering, and design services to clients in the transportation, infrastructure, environment, building, power, energy, water, mining, and resources sectors. Our 55,000 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities we serve through a culture of innovation, integrity, and inclusion. Sustainability and science permeate our work. WSP derived about half of its $10.3B (CAD) 2021 revenues from clean sources. The Corporation’s shares are listed on the Toronto Stock Exchange (TSX: WSP). To find out more, visit wsp.com

ABOUT E&IE&I was formed through various acquisitions under Amec and Foster Wheeler (subsequently “Amec Foster Wheeler”) between 2008 and 2014 and was later acquired through Wood’s purchase of Amec Foster Wheeler. E&I provides engineering, remediation consulting, environmental permitting, inspection & monitoring, and environmental management services to clients in the government, industrial, infrastructure, oil & gas, power, water and mining industries. E&I operates in approximately 100 offices with approximately 6,000 environmental consulting staff across more than 10 countries.

FORWARD-LOOKING STATEMENTSThis press release contains information or statements that are or may be “forward-looking statements” within the meaning of applicable Canadian securities laws. When used in this press release, the words “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “forecast”, “project”, “intend”, “target”, “potential”, “continue” or the negative of these terms or terminology of a similar nature as they relate to the Corporation, an affiliate of the Corporation or the combined firm following the Acquisition, are intended to identify forward-looking statements. Forward-looking statements in this press release include, without limitation, those information and statements related to the Acquisition, the new term credit facility, the expected timing of completion and benefits of the Acquisition, the conditions precedent to the closing of the Acquisition and the Corporation's future growth, results of operations, performance business, prospects and opportunities, the expected synergies to be realized and certain expected financial ratios. Although the Corporation believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that they will prove to be 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, including risks and uncertainties relating to the following: the possible failure to realize anticipated benefits of the Acquisition, the integration of E&I’s business, the loss of certain key personnel of E&I, the possible failure to achieve the anticipated synergies, the failure to close the Acquisition or change in the terms of the Acquisition, failure to obtain the regulatory approvals in a timely manner, or at all, increased indebtedness, transitional risk, the fact that WSP does not currently own E&I, potential undisclosed costs or liabilities associated with the Acquisition, the absence of a financing condition in the Agreement, the reliance on information provided by E&I, change of control and other similar provisions and fees, the nature of acquisitions, the exchange rate on the closing date of the Acquisition, the fact that the combined firm will continue to face the same risks that the Corporation currently faces, potential litigation and other factors discussed or referred to in the “Risk Factors” section of WSP's Management’s Discussion and Analysis for the year ended December 31, 2021, and WSP's Management’s Discussion and Analysis for the three-month period ended April 2, 2022 (together, the “MD&As”), which are available under WSP’s profile on SEDAR at www.sedar.com. The foregoing list is not exhaustive and other unknown or unpredictable factors could also have a material adverse effect on the performance or results of WSP or E&I. WSP’s forward-looking statements are expressly qualified in their entirety by this cautionary statement. For additional information on this 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, reference is made to the MD&As, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and except as required under applicable securities laws, WSP does not undertake to update or revise these forward-looking statements, whether written or verbal, that may be made from time to time by itself or on its behalf, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by these cautionary statements.

NON-IFRS MEASURESThe Corporation reports its financial results in accordance with IFRS. In this press release, the following non-IFRS measures are used by the Corporation: net revenues; adjusted EBITDA; adjusted net earnings; adjusted net earnings per share; and net debt to adjusted EBITDA ratio. These measures are defined in section 19, “Glossary of segment reporting measures, non-IFRS and other financial measures” of WSP's Management’s Discussion and Analysis for the three-month period ended April 2, 2022 (the “Q1 MD&A”), which is posted on WSP’s website at www.wsp.com, and filed on SEDAR at www.sedar.com. Additional details for these non-IFRS measures can also be found in the Q1 MD&A.The following non-IFRS measures are also used by the Corporation in this press release and defined as follows: “Net revenues” as it relates to E&I has the same definition as WSP’s definition of “net revenues”, being revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from clients. “Accretion” or “accretive” is defined as the expected change in WSP’s adjusted net earnings per share after giving effect to the Acquisition and any Acquisition related adjustments. “Pre-IFRS 16 adjusted EBITDA” means the estimated adjusted EBITDA of E&I minus lease payments as included in the cash flow statements for the twelve-month period ending December 31, 2022. “Pro forma adjusted EBITDA” means the estimated adjusted EBITDA of WSP and E&I for the twelve-months period ending December 31, 2022. “Pro forma net debt” means net debt after giving effect to the Acquisition, the new term credit facility and any Acquisition related adjustments. “Pro forma net debt to adjusted EBITDA ratio” is calculated using pro forma net debt to the pro forma adjusted EBITDA.The non-IFRS financial measures used in this press release do not have a standardized meaning as prescribed by IFRS. Management of the Corporation believes that these non-IFRS measures provide useful information to investors and analysts for analyzing the Acquisition. These non-IFRS measures are not recognized under IFRS and may differ from similarly-named measures 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.

NO OFFER OR SOLICITATIONTHIS PRESS RELEASE IS NOT INTENDED TO AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR BUY, OR THE SOLICITATION OF AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR PROXY FROM ANY PERSON. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

Alain MichaudChief Financial OfficerWSP Global Inc.alain.michaud@wsp.com Phone: 438-843-7317