In a significant move for both companies, private equity firm Warburg Pincus has reached an agreement to sell TRC Companies, an engineering and consulting firm based in Windsor, Connecticut, to Canadian engineering and professional services group WSP Global for approximately $3.3 billion in cash. This transaction not only marks a notable exit for Warburg Pincus but also accelerates WSP's expansion efforts in the North American market.
Under the terms of the deal, WSP will acquire TRC, which specializes in providing services to electrical utilities, energy companies, and public-sector clients. The acquisition is poised to position WSP as the largest engineering and design firm in the United States, further solidifying its status in the global engineering landscape. This development is part of WSP's long-term acquisition strategy that has substantially transformed the company into a comprehensive engineering platform on a global scale.
To finance this acquisition, WSP plans to raise approximately CAD 850 million through an equity offering, which includes a CAD 118 million investment from its largest shareholder, Caisse de dépôt et placement du Québec (CDPQ). Following this capital raise, CDPQ is expected to hold around 14% of WSP. The remainder of the acquisition will be financed through debt, with commitments from Canadian Imperial Bank of Commerce and JPMorgan.
For the fiscal year ending June 30, TRC generated revenues of $1.5 billion and reported an adjusted EBITDA of $192 million. WSP has indicated that the acquisition will be accretive to adjusted earnings per share before any potential cost synergies are factored in.
For Warburg Pincus, the sale represents the culmination of a strategic investment in TRC, which it acquired from New Mountain Capital in October 2021. At that time, TRC employed just under 6,000 individuals. Since then, the company has expanded its workforce to approximately 8,000 employees, driven by both organic growth and rising demand for infrastructure, energy transition, and utility-related services.
WSP has pursued an aggressive merger and acquisition strategy in recent years, evolving from a mid-sized Canadian firm into a global powerhouse with over 200 offices across the United States and operations in Europe, the Middle East, and Asia. Management has consistently articulated that these acquisitions are a direct response to client demand for more integrated and comprehensive technical expertise, rather than expansion for its own sake.
Looking ahead, the transaction is subject to customary regulatory approvals, and both companies will provide updates regarding the anticipated timeline for closure and any further developments. Shareholders, employees, and market analysts are closely monitoring the situation, as this acquisition is expected to have significant implications for the competitive landscape in the engineering sector.