ARCADIS to Merge with Malcolm Pirnie
ARCADIS, the international consultancy, design, engineering, and management services company, announced on June 25 that it has signed a merger agreement to acquire 100 percent of the shares of Malcolm Pirnie, a White Plains, N.Y.-based company predominantly active in water and environmental consulting and engineering, currently owned by about 80 internal shareholders.
At closing, Malcolm Pirnie will be a wholly-owned subsidiary of ARCADIS U.S. Malcolm Pirnie has more than 1,700 employees, 2008 gross revenues of $392 million, net revenues of $294 million, and profitability close to ARCADIS overall target EBITA margin of 10 percent.
ARCADIS will finance this merger by issuing 5.74 million shares to present Malcolm Pirnie shareholders and key employees, in addition to a cash amount of $135 million, for which ARCADIS has secured a new debt facility from Rabobank, ING and RBS. The shares have a lock-up period of 6 months with incentives to hold them for at least 18 months after closing.
The merger is contingent on Malcolm Pirnie shareholder approval and related closing requirements. It is anticipated that the merger will be completed in July. The major shareholders comprising ownership of 48 percent of the outstanding shares have provided irrevocable support of the merger.
Malcolm Pirnie, having roots going back to 1895, provides infrastructure consulting and
engineering services in water and wastewater treatment, environmental services, and through its Red Oak division management consulting services. With over 60 offices, the company is represented in most of the top 20 major metropolitan areas of the United States. The client base of Malcolm Pirnie consists mostly of public sector clients including municipalities and the U.S. federal government. Private sector clients include companies from the energy, mining, and transportation market sectors. Malcolm Pirnie is also active internationally in the Asia-Pacific region, Middle East, Puerto Rico and Chile.
Combined with ARCADIS’ international position in water management and coastal engineering, merger creates a major position in the global water market with annual revenues approaching $500 million, representing about 17 percent of combined revenues. William P. Dee, president and chief executive officer of Malcolm Pirnie said, “We believe that this step allows Malcolm Pirnie to fulfill several strategic goals in one step:
First, it will provide us rapid access to international markets, where we have a stated goal to position ourselves as a world leader in water-related engineering and consulting services.
Second, it strengthens our position in the federal market and industrial environmental market, where we can now use ARCADIS’ technology and GRiP® approach to serve our clients in more ways.
Third, this offers many career opportunities for our staff to work on the most exciting challenges on a global basis, which is an important issue for future success. Our board has unanimously recommended the merger with ARCADIS to Malcolm Pirnie shareholders.”