RPS Group shares jump as Tetra Tech outbids WSP

California-based group Tetra Tech has agreed a £636 million deal to acquire RPS Group, headquartered in Oxfordshire.

RPS Shares rose sharply today, rising 12.08 percent or 25.00p to 232.00p in early morning trading.

The US group’s bid surpassed a £591 million bid from consultancy giant WSP, which was set to be approved following its announcement in August.

But Tetra Tech now appears to be the new owner of RPS, which employs consultants, designers, planners, engineers and technical specialists around the world who provide specialized services to government and private sector clients with a focus on front-end end consulting.

The acquisition price represents a premium of approximately 7.8 percent over the offer price of 206p per RPS share tendered under the WSP offer. WSP has informed investors that it is considering its options.

The Tetra Tech deal values ​​the entire issued and issuable share capital of RPS at approximately £636 million.

Tetra Tech said: “The acquisition price further represents a premium of approximately 89.7 percent. at the Closing Price per RPS Share of 117 pence on August 8, 2022 (being the last Business Day prior to the start of the Offering Period).’

RPS employs 5,000 people, which will increase Tetra Tech’s total workforce to 26,000.

John Douglas, chief executive of RPS, said: “Joining Tetra Tech represents a very attractive combination of two industry leaders for our customers and provides our people with an ideal opportunity to realize the goals of RPS and make a meaningful contribution 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 business and the benefits for our people and customers.

“By working together, Tetra Tech provides RPS and its employees with a strong and culturally aligned platform that creates a leading consultancy and engineering firm addressing climate change and all its impacts.”

Dan Batrack, Chairman and Chief Executive Officer of Tetra Tech, said: “The RPS Group advances our long-term strategy to strengthen our position as the leading global high-end consultancy in the fields of water, environment, sustainable infrastructure and energy transformation.

“We welcome the employees of the RPS Group to join us and jointly leverage our longstanding customer relationships and project experience. As a global consulting firm committed to high-quality solutions, we can provide even more professional opportunities to our expanded team of employees.”

Peel Hunt analysts said: “We are raising our target price from 206p to 244p (a 10 percent premium over Tetra Tech’s offering) and raising our recommendation from Hold to Add. We await further developments with interest.’