The two international design consultancies will merge in a deal that is expected to be finalized later this year.
Arcadis has made a cash offer of C$19.50 per share for all issued and outstanding shares of IBI Group, which equates to C$873 million, or approximately £563 million. This price represents more than 11 times IBI’s estimated earnings for 2022 before interest, taxes, depreciation and amortization.
The stock price offer of C$19.50 is also 30% higher than IBI’s closing stock price on Friday, July 15.
“The acquisition of IBI Group marks an important step in the implementation of Arcadis’ business strategy,” said Peter Oosterveer, Arcadis Chief Executive Officer.
“Together with the management team of the IBI Group, we have great ambitions. Our shared vision to digitally transform our industries and provide our customers with new and innovative technology solutions sets us apart from our peers,” he continued.
“Today’s announcement will help accelerate this vision, leveraging Arcadis’ global platform and IBI Group’s strong track record by creating a strong fourth global business area ‘Intelligence’, complementing the services and solutions we offer our clients through our three existing GBAs (Resilience, Places, Mobility).”
Scott Stewart, chief executive of IBI, echoed Oosterveer’s sentiments.
“The combination of IBI Group and Arcadis will accelerate our ability to define the cities of tomorrow,” said Stewart.
“As a combined force, we will embed the intelligence sector and technology initiatives of the IBI Group into the vast global footprint of Arcadis,” he continued. “We will establish the largest and most diverse architectural firm in North America and potentially the world.
“Furthermore, we will expand the capabilities and depth of the IBI Group in environmental infrastructure and services, amplifying our ability to support our clients’ missions for sustainable cities and communities.
Within three years, Arcadis estimates that it will realize annual savings of 15 million Canadian dollars in operating costs. The company also expects a “more substantial” increase in revenue.
Goldman Sachs acted as financial advisor to Arcadis, while Strikeman Elliott provided legal advice. Financing for the operation was provided by Goldman Sachs and Bank of America.
National Bank Financial advised IBI, Blake, Cassles & Graydon and Bennett Jones acting as legal advisors.
Arcadis has 29,000 employees in more than 70 countries. It generates nearly £3 billion in revenue.
IBI has more than 60 offices around the world and 3,500 employees. It generates revenues of over £285 million.
Arcadis and IBI are both active in the North West. IBI recently opened its 6,600 square foot office in the Dantzic building in Manchester. Meanwhile, Arcadis has offices in Manchester, Warrington and the Cumbrian village of Moor Row.