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Pasadena, California — (Business Wire–Tetra Tech, Inc.’s acquisition of the entire RPS Group in cash for 222 pence per share (the “acquisition”). The acquisition was unanimously approved by the board of directors of RPS Group.
RPS Group and Tetra Tech’s 26,000 associates form a leading 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 and provides high-quality solutions, particularly in energy conversion, water and program management, to government and commercial clients. Tetra Tech is a global top-ranked consultancy with #1 ratings in both water and environmental management as published in Engineering News-Record. Its 21,000 associates are technical experts who deliver more than 70,000 projects a year around the world.
The RPS team will significantly expand Tetra Tech’s water practice in the UK and enhance Tetra Tech’s leading position in renewable energy and environmental management. The merger will further strengthen our geographic presence in the UK, EU and Australia. The RPS Group and Tetra Tech are culturally linked and together, a Lead by science® An approach to solving critical issues such as climate change, resilience and energy transition. The combination of RPS Group and Tetra Tech will advance both companies’ strategies in advanced data analytics and specialized software applications such as water management, ocean analytics and containment modeling.
“The RPS Group will advance our long-term strategy to enhance our position as a premier global senior consulting and engineering firm focused on water, environment, sustainable infrastructure and energy transformation.” Tetra Tech Chairman and CEO Dan Butrak said. “We welcome RPS Group Associates to join us and leverage our long-standing client relationships and project experience. As a global consultancy committed to high-end solutions, we can offer even more professional opportunities to our wider team.
RPS non-executive director Ken Lever commented, “The RPS board is pleased to recommend Tetra Tech’s offer, which will deliver greater value to our shareholders. Our alliance with Tetra Tech offers attractive opportunities and long-term benefits to our partners and global customers.
In addition, RPS CEO John Douglas explained, “Joining Tetra Tech represents a very attractive combination for our clients of two leading companies in the industry and gives our people a great opportunity to make a significant contribution to the world in realizing RPS’ goals.” Challenges in energy transition and water management around the world. I am very excited about the future of our company and the benefits for our people and customers. Together, Tetra Tech will provide RPS and its employees with a strong and culturally aligned platform that will create a pre-eminent consulting and engineering firm that addresses climate change and all its impacts.
The transaction
The acquisition is proposed to be implemented under Section 26 through a court-approved scheme of arrangement (the “Plan”). UK Companies Act 2006. The objective of the Scheme is for Tetra Tech to become the indirect wholly owned subsidiary and to provide the RPS Group with the share capital.
Details of the proposed acquisition will be sent to RPS Group shareholders within 28 days of the date of this announcement (unless otherwise permitted by the UK City Code on Takeovers and Mergers). The acquisition is expected to be completed subject to the satisfaction or waiver of conditions, approval of the scheme by RPS Group shareholders, receipt of relevant regulatory approvals and court approval of the Scheme of Arrangement. By the end of 2022.
For more information regarding the proposed acquisition, readers may refer to the previously published United Kingdom notice of acquisition (the “Notice”) under Section 2.7 of the United Kingdom City Code on Takeovers and Mergers and Tetra Tech’s website at tetratech.com/investor-offer. The announcement and other relevant documents (including, among others, the New Credit Facility (as defined below)) are also attached to this release as an exhibit to Tetra Tech’s Current Report on Form 8-K filed with the SEC. Please note that this release is not a summary of the announcement and should not be considered a substitute for reading the announcement. Therefore, we strongly urge you to read the entire notice in its entirety in relation to this issue, which applies in all respects.
The acquisition is expected to be accretive to mid-teens to high-teens percent adjusted earnings per share (EPS), after realizing the full benefits of the merger with Tetra Tech, an expected cost synergy of £21 million. The cost of bringing these mergers to fruition is estimated to be £16 million and will incur significant costs in the first twelve months after closing. Adjusted EPS excludes one-time transaction-related costs and intangibles.
All relevant documents are available on Tetra Tech’s website at tetratech.com/investor-offer.
Purchase finance
The bid announcement also revealed that Tetra Tech had secured 714 million pounds (approximately $800 million) and $350 million in new credit facility “certain funds,” including a commitment of the full amount of the purchase price. of the total share capital of RPS issued and payable. Bank of America, NA is acting as the administrative agent and sole lender in connection with the new credit facility.
The new credit facility is designed to ensure compliance with the “certain funds” requirements of the UK Municipal Act on acceptance and pooling. In addition, an Acquisition Financing Plan was designed and structured with a view to preserving Tetra Tech’s credit profile.
The New Credit Facility contains representations, warranties, conditions, covenants, leverage ratios and events of default customary for a transaction of this nature.
Approvals and recommendations
The board of directors of RPS Group unanimously recommended the acquisition.
Tetra Tech has also received commitments and letters of intent from RPS Group’s major shareholders to vote in favor of the transaction at the RPS Group shareholders’ meetings to be called in connection with the Scheme, representing the total number of RPS Group shares. About 28% of RPS Group’s issued capital on September 23, 2022.
Financial and legal advisors
BofA Securities is acting as financial advisor to Tetra Tech on the acquisition. Legal advice to Tetra Tech is being provided by Hogan Lovells International LLP.
About the RPS team
RPS Group is a public limited company registered in England and Wales. RPS Group shares are listed on the official list of the London Stock Exchange. In the year 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 with approximately 5,000 talented employees.
As a technology-enabled consultancy operating across a range of sectors, RPS Group provides specialized services to government and private sector clients with a focus on front-end consultancy. The RPS team creates shared value for all stakeholders by solving problems in a complex, urbanized, resource-scarce world and focuses its expertise on parts of the project life cycle to have a significant impact on project outcomes with a strong sustainability agenda. RPS Group has been widely recognized in this regard by being ranked number one in the UK for Environmental Analysis for Climate Change and Energy Consultancy for 2019/2020, as well as being recognized as a Top 200 Environmental Firm by Engineering News Record in 2021 and 2021. One of the first “Carbon Champions” by the Institute of Civil Engineers.
The RPS Group operates from 100 offices in 12 countries, with more than 99% of its net income in the 2021 financial year derived from activities in OECD countries. The majority of our net income for the 2021 financial year was generated from our operations in the United Kingdom, Australia and the United States.
About Tetra Tech
Tetra Tech is a leading provider of 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 global development. we are Lead by science® To provide sustainable and strong solutions to our customers. For more information about Tetra Tech, please visit tetratech.com or follow us on LinkedIn Twitterand 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 results and outcomes are not guaranteed and are subject to certain risks, uncertainties and assumptions (“forward-looking factors”), and may differ from those expressed. For a description of future conditions that could cause actual results to differ materially from such forward-looking statements, see the discussion under the “Risk Factors” section of Tetra Tech’s Form 10-K and Form 10-Q filed with US Securities. Exchange Commission.
Except as required by applicable law or regulation, Tetra Tech disclaims any obligation or commitment to publish any revisions or revisions to the forward-looking statements contained in this announcement to reflect any changes or changes in events that Tetra Tech anticipates. The conditions or circumstances on which any statement is based.
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