What happened – WSP announced today that it acquired AKF Group LLC (“AKF”), a 365-person Engineering firm based in New York with 13 locations across the U.S. and Mexico (founded in 1989). The firm specializes in Design for mechanical, electrical, and plumbing across healthcare, science & technology, and mission-critical facilities.
Our thoughts – The acquisition of AKF adds complementary expertise to WSP’s Property & Buildings team and expands the company’s U.S./Mexico headcount (recall that the U.S./Latin America contributed to 37% of WSP’s 2023 Net Revenue). This is WSP’s fourth acquisition of the year (spanning across Finland, Spain, Canada, and now the U.S./Mexico), through which the company has added +765 employees to its headcount. Overall, we view the acquisition of AKF positively, as it expands the company’s footprint in the U.S. (which has meaningful tailwinds supporting growth in this market over the near- to medium-term, namely via the IIJA, IRA, and CHIPS Act) and Mexico.
From a metrics standpoint, we estimate Net Revenue of $55–65MM, Adjusted EBITDA of $6–8MM, and a purchase price of $60– 75MM before synergies. Looking ahead, given WSP’s strong balance sheet position exiting Q4 (Net Debt/ LTM Adjusted EBITDA was 1.5x; ~2.0x including leases), we think the company remains well positioned to pursue additional acquisitions.