Arcadis to acquire Hyder Consulting

Dutch engineering company Arcadis has made a UK£ 256 million (US$ 435 million) cash offer to acquire UK design and engineering consultancy Hyder Consulting. Hyder’s board is recommending the deal to shareholders.

Arcadis said the £ 6.50 (US$ 11.00) per share offer represented a +38.5% premium on Hyder’s closing price on July 30, the day before the deal was announced. It values the company at just over 11 times its earnings before interest, tax, depreciation and amortisation (EBITDA), which came to UK£ 23.6 million (US$ 40 million) for the year ended 31 March, 2014.

Arcadis said the addition of Hyder’s design and engineering capabilities would strengthen its position in the infrastructure, buildings, water and natural resources sectors, as well as in specific regions. It added that Arcadis and Hyder operate in “Highly complementary geographies.”

Commenting on the deal, Arcadis CEO Neil McArthur said, "Hyder is a unique company with a long history of being involved in the leading edge of design and engineering. Through the transaction we see an excellent opportunity to better serve our clients by further deepening our capabilities in global design and engineering in growth markets."

Hyder chief executive Ivor Catto added, "Arcadis’ recommended cash offer announced today represents a significant premium to Hyder's current share price. Although the Board believes that Hyder has a strong future as an independent business, it considers that this cash offer substantially recognises Hyder's growth prospects, and provides certainty, in cash, to our shareholders today. The resultant group should also provide further opportunities for our highly valued clients and staff."

Hyder is one of the world's longest established engineering consultancies, with a heritage that spans over 200 years. Headquartered in the UK, it operates in Asia, Australia, the Middle East, Germany and the UK with some 4,500 employees. Its revenues last year were UK£ 297 million (US$ 503 million).

Arcadis was founded in 1888 and is listed on the NYSE Euronext Amsterdam stock market with a market capitalisation of some € 1.74 billion (US$ 2.2 billion). Its revenues last year came to € 2.5 billion (US$ 3.2 billion).

Industry consolidation

The deal is the latest in a string of mergers among consultants this year which has seen Amec make an offer for Foster Wheeler, SNC-Lavalin bid for Kentz and Aecom swallow up both Hunt Construction and URS.