Is the acquisition of WSP by Canada’s Genivar the end of another independent UK consultant?
It is tempting to regard the acquisition of WSP by an engineer barely known outside of Canada as the end of another historic independent UK consultant.
The financials of the deal leave no doubt: Genivar will buy all of WSP’s shares, leaving the ownership entirely Canadian. However, WSP founder Chris Cole has wrestled a unique degree of control of the merged firm, based on the reality that in the market WSP are more likely to be seen as the senior partner.
Not only is the UK consultant much larger but it is also a genuinely global firm, whereas 95% of Genivar’s revenues come from Canada. The fact that it is Genivar buying WSP, rather than the other way round, is merely a sign of the relative strength of the UK and Canadian economies and, vitally, stock markets.
The reality is it works well for both parties. Genivar can use its currency strength to buy an international presence, and WSP gets the balance sheet strength to expand further, while retaining its identity.
The Canadian firm’s background is similar to WSP’s - a consultant founded in engineering (it makes up about 70% of both businesses). Where WSP can boast strength in buildings, PFI and environmental consulting, Genivar is stronger in oil, gas and mining.
The pressure is now on remaining UK independents to decide whether they join the arms race of scale, or choose a different route.
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