WSP to buy Louis Berger for $400M
- Canada-based engineering professional services firm WSP Global announced Monday that it plans to buy engineering, design and environmental consultancy firm Berger Group Holdings (Louis Berger) for U.S. $400 million. WSP will finance the purchase with a loan from the Canadian Imperial Bank of Commerce.
- WSP will absorb Louis Berger's 5,000 employees, most of whom are located in the U.S., where the company generated 70% of its 2018 revenues, but the purchase will also add to WSP's presence in Europe, the Middle East, Africa, India and Latin America. Louis Berger's experience in transportation and infrastructure, environmental and water and master planning segments will add to WSP's strength in those areas. The deal is expected to generate $480 million in annual net revenue for WSP, and the company said it will be able to shave off $15 million in combined costs during the first year after closing.
- WSP said it will continue with a planned restructuring of Louis Berger's international operations, a commitment that will cost WSP approximately $50 million. WSP expects the acquisition to be complete in the fourth quarter of this year.
According to Engineering News-Record, the two companies were set to announce the purchase at the end of last year but delayed it because the U.S. Department of Justice was still monitoring Louis Berger after a settlement related to foreign bribe allegations. According to the Justice Department, Louis Berger admitted to violations of the Foreign Corrupt Practices Act (FCPA) and paid a $17 million criminal penalty to settle charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait with $3.9 million in order to win government construction management contracts. Two of Louis Berger's former executives pleaded guilty to conspiracy and FCPA violations. As part of the purchase announcement, WSP noted that the monitoring period had come to end.
WSP is a dominant presence in the U.S. infrastructure industry and also announced Monday that it had been selected to take part in a study about a proposed high-speed rail system between Vancouver, British Columbia, and Portland, Oregon. WSP will contribute a business case analysis to the public-private study partnership group, which is made up of the Washington State Department of Transportation, the Oregon Department of Transportation, the British Columbia Ministry of Jobs, Trade and Technology and Microsoft.
WSP also has key roles in the $15 billion Dallas-Houston high-speed rail project, the $4.7 billion BART Silicon Valley Phase II extension in the San Francisco Bay Area and a $1.5 billion gate addition project at Denver International Airport.
Louis Berger’s portfolio includes the Lincoln Memorial Reflecting Pool, the Statue of Liberty, the George Washington Bridge and the World Trade Center. It has also been providing emergency management services for temporary power restoration in Puerto Rico in the fallout of Hurricane Maria. The firm was selected as part of a joint venture to provide project management services to build Doha, Qatar’s first metro and supervise construction of three World Cup stadiums ahead of the FIFA 2022 World Cup.
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