WSP WSP Global Inc

WSP (TSX: WSP) (“WSP”, the “Corporation”, “we”, “us” or “our”), a leading global professional services firm, proudly announces it has entered into an agreement to acquire Power Engineers, Incorporated (“POWER”) a prominent U.S. consulting firm with a leading presence in the Power & Energy (P&E) sector (the “Acquisition”). The Acquisition has been unanimously approved by the boards of directors of both companies. The proposed Acquisition is a strategic move in alignment with WSP’s vision to expand and enhance its P&E services, positioning the Corporation at the forefront of the industry.

POWER stands out with its nearly 50-year legacy of innovation and technical excellence, a highly respected brand, and a reputation for delivering quality services on complex projects. Based in Hailey, Idaho, POWER’s impressive team of approximately 4,000 employees, including approximately 900 shareholders, has a proven track record of serving the most prominent power utilities in North America.

The Acquisition, with a purchase price of US$1,780 million (approximately $2,443.9 million), reflects POWER’s estimated 2024 pre-IFRS 16 adjusted EBITDA3 at a multiple of 15.2x, or 12.5x post-synergies4. This strategic investment is expected to enhance WSP’s financial performance and contribute to meeting and exceeding the objectives of the Corporation’s 2022-2024 Global Strategic Action Plan.

Once the proposed Acquisition is closed, the integration of POWER is expected to complement WSP’s existing three core sectors: Transport & Infrastructure, Property & Buildings, and Earth & Environment; it will also create extensive cross-selling opportunities. Welcoming POWER to our already strong P&E platform, which will be led globally by Holger Peller, the current President and COO of POWER, is anticipated to drive accelerated growth.

The proposed Acquisition underscores WSP’s commitment to its long-term vision and 2022-2024 Global Strategic Action Plan, marking a pivotal step in building a leading global P&E franchise. WSP is thrilled about the prospect of welcoming POWER to the WSP family and is eager to explore the new opportunities this partnership will bring.

“The acquisition will mark a transformative step that will position us at the forefront of the energy transition. This opportunity brings forth a wealth of strategic benefits, including an expanded suite of innovative solutions for our clients and continuous professional growth opportunities for our employees,” commented Alexandre L’Heureux President and Chief Executive Officer of WSP. “By uniting WSP’s extensive global network and POWER’s deep technical expertise, we are poised to provide exceptional solutions and service quality to foster significant advancements in the communities we serve. The trust of our shareholders and our commitment to excellence will empower us to influence the future of the energy sector as we plan to expand our reach and power a sustainable future across the globe.”

Also commenting on the Acquisition, Jim Haynes, Chief Executive Officer of POWER said: “POWER and WSP truly are stronger together. By joining forces, we can supercharge our ability to help clients and communities around the world adapt to the changing energy landscape—and provide more opportunities for our team members to work on the most challenging projects. We’re looking forward to building success together with WSP.”

FINANCIAL HIGHLIGHTS

• Proposed Acquisition of POWER for a total cash purchase price of US$1,780 million (approximately $2,443.9 million).
• Incentive awards of up to US$170M to be paid to a significant number of employees generally over three years following closing of the Acquisition.
• Acquisition price represents 15.2x POWER’s 2024E pre-IFRS 16 Adjusted EBITDA3 before cost synergies, or 12.5x post-synergies.4
• Expected to be immediately accretive to WSP’s adjusted net earnings per share5 before synergies. WSP expects 2026 Accretion3 (as defined below) to be in mid-single digits once cost synergies are fully realized.5
• Expected cost synergies of a minimum of approximately US$25 million are expected to be achieved by the end of 2026, with 50% expected to be realized in 2025.6
• Transaction to be financed with approximately US$1,780 million New Term Loans (as defined below), expected to result in an estimated 2.2x pro forma net debt to adjusted EBITDA ratio3 upon closing7.
• Equity raise of $1,000 million: $500 million private placements with $500 million bought deal public offering (subscription receipts) expected to close on or about August 19, 2024, with a corresponding reduction of the amounts drawn from the New Term Loans.
• Acquisition expected to be completed in the early fourth quarter of 2024, subject to the satisfaction of closing conditions.

CONDITIONS TO THE ACQUISITIONThe Acquisition is subject to certain customary closing conditions, including (i) approval by POWER shareholders, and (ii) regulatory approval in the U.S. The special meeting of the POWER shareholders to consider and vote on the Acquisition is expected to be held on or about September 6, 2024 (the “Special Meeting”). The Acquisition is expected to be completed in the early fourth quarter of 2024.

The Corporation has obtained voting and support agreements in favour of the Acquisition for over 99% of the shares held by the POWER shareholders (including POWER’s management committee and employee directors) who hold together approximately 83% of all of the issued and outstanding POWER shares. Under this agreement, such shareholders have also agreed to vote against any other proposal for a period of three months from the date of the transaction agreement.

The transaction agreement provides for a customary non-solicitation covenant on the part of POWER, which is subject to limited “fiduciary out” provisions until the POWER shareholders vote at the Special Meeting, and a right in favor of WSP to match any “superior proposal” that POWER may receive. WSP will receive a termination fee should the transaction agreement be terminated in connection with a superior proposal or a change in recommendation by the board of directors of POWER.

ACQUISITION FINANCING  

Equity Financing  

The Equity Financing (as defined below) comprises:  

• Approximately $500 million bought deal public offering (the “Offering”) of subscription receipts (the “Offering Subscription Receipts”) at a price of $204.50 per subscription receipt (the “Offer Price”); and
• Approximately $500 million private placements (collectively, the “Concurrent Private Placement” and together with the Offering, the “Equity Financing”) of subscription receipts (the “Placement Subscription Receipts”) at the Offer Price to four existing shareholders of the Corporation, namely (i) GIC Pte. Ltd or one of its affiliates (“GIC”), (ii) Caisse de dépôt et placement du Québec (“CDPQ”), (iii) British Columbia Investment Management Corporation or one of its affiliates (“BCI”), and (iv) a Canadian wholly-owned subsidiary of Canada Pension Plan Investment Board (“CPP Investments” and collectively with GIC, CDPQ and BCI, the “Investors”). 

WSP intends to use the net proceeds from the Equity Financing to fund in part the purchase price payable in respect of the Acquisition (and related costs and expenses) and accordingly reduce amounts to be drawn on the closing of the Acquisition under the New Term Loans (as defined below) to fund the purchase price for the Acquisition. 

Public Offering  

WSP has entered into an agreement with CIBC Capital Markets (“CIBC”), National Bank Financial and RBC Capital Markets as joint-bookrunners (the “Joint Bookrunners”), on behalf of a syndicate of underwriters (the “Underwriters”), to issue and sell, on a “bought deal” basis, 2,445,000 Offering Subscription Receipts at the Offer Price for gross proceeds to the Corporation of approximately $500 million, with each Offering Subscription Receipt representing the right to receive one common share of WSP (a “Common Share”). 

The Corporation has granted the Underwriters an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, until the earlier of 30 days following the date of the closing of the Offering and the Termination Date (as defined herein), to purchase up to an additional number of Offering Subscription Receipts equal to 15% of the Offering Subscription Receipts to be sold pursuant to the Offering at the Offer Price to cover over-allotments, if any, and for market stabilization purposes. 

The Offering Subscription Receipts distributed pursuant to the Offering will be offered in all provinces and territories of Canada pursuant to a prospectus supplement (the “Prospectus Supplement”) to the short form base shelf prospectus of WSP dated August 8, 2024 (the “Base Shelf Prospectus”) to be filed by WSP on or about August 14, 2024, as well as in the United States by way of private placement to “qualified institutional buyers” in reliance upon the exemption from registration provided by Rule 144A under the U.S. Securities Act of 1933, as amended (the “1933 Act”). 

The proceeds from the Offering will be held in escrow pending the completion of the Acquisition. If the Acquisition is completed on or prior to 11:59 pm (Eastern time) on August 12, 2025 (the “Outside Date”), the net proceeds will be released to the Corporation, and each holder of an Offering Subscription Receipt will receive, without additional consideration and without further action, one Common Share for each Offering Subscription Receipt held upon closing of the Acquisition together with, without duplication, an amount, if any, equal to the amount per Common Share of any dividends for which record dates have occurred during the period from the date of the closing of the Offering to the date immediately preceding the date of the closing of the Acquisition, less any applicable withholding taxes. If (i) the closing of the Acquisition does not occur on or prior to 11:59 pm (Eastern time) on the Outside Date; (ii) the Corporation advises the Joint Bookrunners or announces to the public that it does not intend to proceed with the Acquisition, (iii) the transaction agreement is terminated in accordance with its terms, or (iv) a “termination event” (as such term will be defined in the subscription receipt agreement to be entered into on the closing of the Concurrent Private Placement with respect to the Placement Subscription Receipts) occurs (any such event, a “Termination Event” and the date on which the earliest Termination Event occurs, the “Termination Date”), the holders of Offering Subscription Receipts will receive a cash payment equal to the Offer Price of the Offering Subscription Receipts plus their pro rata share of the interest actually earned on the escrowed funds during the term of the escrow. The Underwriters’ fee of $20 million, assuming no exercise of the Over-Allotment Option, representing 4% of the aggregate gross proceeds of the Offering, will be paid as to 50% on the closing of the Offering and 50% upon and subject to the closing of the Acquisition. 

The completion of the Offering is subject to the approval of the Toronto Stock Exchange (the “TSX”). Closing of the Offering is expected to occur on or about August 19, 2024, and is conditional upon the concurrent completion of the Concurrent Private Placement.  

No securities regulatory authority has either approved or disapproved the contents of this press release. The Offering Subscription Receipts have not been, and will not be, registered under the 1933 Act, or any state securities laws. Accordingly, the Offering Subscription Receipts may not be offered or sold within the United States unless registered under the 1933 Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the 1933 Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the Offering Subscription Receipts in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Delivery of the Prospectus Supplement, and any amendments to the documents will be provided in accordance with securities legislation relating to procedures for providing access to a shelf prospectus supplement, and any amendment. The Prospectus Supplement will be (within two business days of the date hereof) accessible on SEDAR+ at www.sedarplus.ca. An electronic or paper copy of the Prospectus Supplement, and any amendment to the documents, may be obtained without charge from CIBC Capital Markets at 161 Bay Street, 5th Floor, Toronto, ON M5J 2S8 or by telephone at 1-416-956-6378 or by email at mailbox.Canadianprospectus@cibc.com by providing the contact with an email address or address, as applicable. The Prospectus Supplement contains important, detailed information about the Corporation and the proposed Offering. Prospective investors should read the Prospectus Supplement (when filed) before making an investment decision.

Concurrent Private Placement  

Concurrently with this announcement, WSP has also entered into subscription agreements pursuant to which the Corporation will complete the Concurrent Private Placement at the Offer Price with (i) GIC for aggregate gross proceeds to the Corporation of approximately $167 million, (ii) CDPQ for aggregate gross proceeds to the Corporation of approximately $158 million, (iii) BCI for aggregate gross proceeds to the Corporation of approximately $125 million, and (iv) CPP Investments for aggregate gross proceeds to the Corporation of approximately $50 million. 

Each of the Investors has also been granted an option (the “Additional Subscription Option”) to purchase a number of additional Placement Subscription Receipts representing up to 15% of the number of Placement Subscription Receipts subscribed by each of them on closing, subject to, and in the same proportion as the Over-Allotment Option being exercised by the Underwriters. 

The issuance of the Placement Subscription Receipts under the Concurrent Private Placement is subject to the approval of the TSX. Closing of the Concurrent Private Placement is scheduled to occur concurrently with the closing of the Offering and is conditional upon the concurrent completion of the Offering. 

Assuming completion of the Concurrent Private Placement and the Offering and the issuance of the Common Shares underlying the Placement Subscription Receipts and the Offering Subscription Receipts upon the closing of the Acquisition, but not the exercise of the Over-Allotment Option or the Additional Subscription Option, (i) CDPQ will beneficially own, or exercise control or direction over, directly or indirectly, an aggregate of 20,469,855 Common Shares representing approximately 15.8% of the issued and outstanding Common Shares, and (ii) CPP Investments will beneficially own, or exercise control or direction over, directly or indirectly, an aggregate of 15,466,389 Common Shares representing approximately 11.9% of the issued and outstanding Common Shares. 

The Placement Subscription Receipts and the underlying Common Shares will be subject to a four month hold from the closing date of the Concurrent Private Placement. In accordance with the terms of the Subscription Agreements, all Common Shares issued pursuant to the terms of the Placement Subscription Receipts will also be subject to contractual lockups for a period of six (6) months following the date of issuance of such Common Shares. 

Upon and conditional on the closing of the Acquisition, each of the Investors (or their respective designees) will be entitled to a capital commitment fee equal to 4% of the aggregate purchase price for the Placement Subscription Receipts for which each of them has subscribed (and any additional Placement Subscription Receipts each of them has subscribed pursuant to the Additional Subscription Option, as applicable). 

New Term Loans  

Concurrently with the announcement of the Acquisition, Canadian Imperial Bank of Commerce, acting as sole arranger and sole bookrunner, provided fully committed credit facilities consisting of (a) a $500 million senior unsecured non-revolving term credit facility, and (b) a US$1,425 million senior unsecured non-revolving term credit facility (collectively, the “New Term Loans”). The New Term Loans will be governed by an incremental facility supplement to the Corporation’s seventh amended and restated credit agreement dated as of April 27, 2023, as amended from time to time, with a syndicate of financial institutions.

All of the above elements of the Acquisition financing plan have been designed and structured with a view to preserving WSP’s investment grade rating. 

Related Party Transaction Matters 

Each of CDPQ and CPP Investments beneficial owns, or has control or direction over, directly or indirectly, Common Shares representing more than 10% of the issued and outstanding Common Shares of WSP. As a result of the foregoing, the Concurrent Private Placement, insofar as it involves CDPQ and CPP Investments, is a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of minority security holders in special transactions (“MI 61-101”). The Corporation has relied on the exemptions from the valuation and minority approvals of MI 61-101 contained in paragraphs 5.5(a) and 5.7(a) of MI 61-101 on the basis that neither the fair market value of the Concurrent Private Placement, insofar as it involves CDPQ and CPP Investments (including the capital commitment fee payable to each of them), nor the consideration thereof, exceeds 25% of the market capitalization of the Corporation. 

FINANCIAL AND LEGAL ADVISORSPerella Weinberg Partners and the Environmental Financial Consulting Group (EFCG) are acting as advisors to WSP on the Acquisition. Legal advice is being provided to WSP by Skadden, Arps, Slate, Meagher & Flom LLP in the United States and Stikeman Elliott LLP in Canada. AEC Advisors is acting as the exclusive financial advisor to POWER on the Acquisition, with legal advice being provided to POWER by Katten Muchin Rosenman LLP.

WEBCASTWSP will host a webcast today at 4:45 p.m. (Eastern Daylight Time) to discuss the Acquisition. Exceptionally, there will be no question-and-answer session, given the concurrent equity offering.

To join the webcast, please register at https://www.icastpro.ca/scfe7q or access www.WSP.com/investors

A presentation of the Acquisition is accessible on the webcast platform and under the “Investors” section of WSP’s website.

ABOUT WSPAs one of the largest professional services firms in the world, WSP exists to future-proof our cities and our environment. It provides strategic advisory, engineering, and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water, and mining sectors. Its 69,300 trusted professionals are united by the common purpose of creating positive, long-lasting impacts on the communities it serves through a culture of innovation, integrity, and inclusion. In 2023, WSP reported $14.4 B (CAD) in revenue. The Corporation’s shares are listed on the Toronto Stock Exchange (TSX: WSP).

ABOUT POWERPOWER is an engineering and environmental consulting firm specializing in integrated solutions for clients in the power delivery, power generation, food and beverage, government, renewables and storage, campus energy, chemicals, and oil and gas industries. Founded in 1976, it is an employee-owned company with 50 offices and more than 4,000 employees across North America. For more information, please visit https://www.powereng.com

ABOUT GICGIC is a leading global investment firm established in 1981 to secure Singapore’s financial future. As the manager of Singapore’s foreign reserves, GIC takes a long-term, disciplined approach to investing and is uniquely positioned across a wide range of asset classes and active strategies globally. These include equities, fixed income, real estate, private equity, venture capital, and infrastructure. Its long-term approach, multi-asset capabilities, and global connectivity enable it to be an investor of choice. GIC seeks to add meaningful value to its investments. Headquartered in Singapore, GIC has a global talent force of over 2,300 people in 11 key financial cities and has investments in over 40 countries. For more information, please visit www.gic.com.sg or follow on LinkedIn. 

ABOUT CDPQCDPQ invests constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, CDPQ works alongside its partners to build enterprises that drive performance and progress. CDPQ is active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2023, CDPQ’s net assets totalled CAD 434 billion. For more information, visit cdpq.com, consult CDPQ’s LinkedIn or Instagram pages, or follow CDPQ on X. CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.

ABOUT BCIBCI is amongst the largest institutional investors in Canada, with C$250.4 billion in gross AUM as of March 31, 2024. Based in Victoria, British Columbia, with offices in Vancouver, New York, and London, U.K., BCI manages a portfolio of diversified public and private market investments on behalf of its 29 British Columbia public sector clients. With a global outlook, BCI integrates ESG factors into investment decisions and activities that convert savings into productive capital to meet clients’ risk and return requirements over time. Founded in 1999, BCI is a statutory corporation created by the Public Sector Pension Plans Act. For more information, visit BCI.ca or LinkedIn.

ABOUT CPP INVESTMENTSCPP Investments™ is a professional investment management organization that manages the Fund in the best interest of the more than 22 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2024, the Fund totalled $632.3 billion. For more information, please visit www.cppinvestments.com or follow CPP Investments on LinkedIn, Instagram or on X @CPPInvestments.

FORWARD-LOOKING STATEMENTSIn addition to disclosure of historical information, WSP may make or provide statements or information in this press release that are not based on historical or current facts and which are considered to be forward-looking information or forward-looking statements (collectively, “forward-looking statements”) under Canadian securities laws. These forward-looking statements relate to future events or future performance and reflect the expectations of management of WSP (“Management”) regarding, without limitation, the growth, results of operations, performance and business prospects and opportunities of WSP or the trends affecting its industry.

This press release may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation, including about the pending Acquisition by WSP of POWER, the Offering and the Concurrent Private Placement, including in respect of the use of proceeds therefrom, the closing of the Offering and the Concurrent Private Placement; the conditions precedent to the closing of the Acquisition; the expected closing date of the Acquisition; the expected timing of the Special Meeting; the New Term Loans, available liquidities, the attractiveness of the Acquisition from a financial perspective and expected accretion in various financial metrics (including estimated 2026 Accretion, 2024 POWER Pre-IFRS 16 Adjusted EBITDA, 2024 POWER Post-IFRS 16 Adjusted EBITDA and WSP’s Pro forma net debt to adjusted EBITDA ratio upon closing of the Acquisition and within 12 months following closing of the Acquisition); expectations regarding anticipated cost savings and synergies; the strength, complementarity and compatibility of POWER’s business with WSP’s existing business and teams; other anticipated benefits of the Acquisition and their expected impact on WSP’s delivery of its strategic plan and its long-term vision, future growth, results of operations, performance, business, prospects and opportunities, WSP’s business outlook, objectives, development, plans, growth strategies and other strategic priorities, and WSP’s leadership position in its markets; and statements relating to WSP’s future growth, results of operations, performance business, prospects and opportunities, the expected synergies to be realized and certain expected financial ratios and other statements that are not historical facts. Forward-looking statements can typically be identified by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “forecast”, “project”, “intend”, “target”, “potential”, “continue” or the negative of these terms or terminology of a similar nature. Such forward-looking statements reflect current beliefs of Management and are based on certain factors and assumptions, which by their nature are subject to inherent risks and uncertainties. While WSP considers these factors and assumptions to be reasonable based on information available as at the date of this press release, actual events or results could differ materially from the results, predictions, forecasts, conclusions or projections expressed or implied in the forward-looking statements.

Forward-looking statements made by WSP are based on a number of assumptions believed by WSP to be reasonable as at the date of this press release, including assumptions about the satisfaction of all closing conditions and the successful completion of the Offering and the Concurrent Private Placement within the anticipated timeframe; the expected timing of completion of the Acquisition and the conditions precedent to the closing of the Acquisition (including the required approval from shareholders of POWER and the regulatory approval in the U.S.); WSP’s ability to retain and attract new business, achieve synergies and maintain market positions arising from successful integration plans relating to the Acquisition; WSP’s ability to otherwise complete the integration of POWER within anticipated time periods and at expected cost levels; WSP’s ability to attract and retain key employees in connection with the Acquisition; Management’s estimates and expectations in relation to future economic and business conditions and other factors in relation to the Acquisition and resulting impact on growth and accretion in various financial metrics; Management’s expectations in relation to the future performance and economic conditions and other factors in relation to POWER; the realization of the expected strategic, financial and other benefits of the Acquisition in the timeframe anticipated; the accuracy and completeness of the information (including financial information) provided by POWER; the absence of significant undisclosed costs or liabilities associated with the Acquisition; general economic and political conditions; the state of the global economy and the economies of the regions in which WSP or POWER operate; the state of and access to global and local capital and credit markets; interest rates fluctuations; working capital requirements; the collection of accounts receivable; WSP obtaining new contract awards; the type of contracts entered into by WSP; the anticipated margins under new contract awards; the adequate utilization of WSP’s workforce; the ability of WSP to attract new clients; the ability of WSP to retain current clients; changes in contract performance; project delivery; WSP’s competitors; the acquisition and integration of businesses in the future; WSP’s ability to manage growth; external factors affecting the global operations of WSP; the state of WSP’s backlog; the joint arrangements into which WSP has entered or will enter; capital investments made by the public and private sectors; relationships with suppliers and subconsultants; relationships with Management, key professionals and other employees of WSP; the maintenance of sufficient insurance; the management of environmental and health and safety risk; the sufficiency of WSP’s current and planned information systems, communications technology and other technology; the sufficiency of WSP’s cybersecurity measures; compliance with laws and regulations; future legal proceedings; the sufficiency of internal and disclosure controls; the regulatory environment; impairment of goodwill; foreign currency fluctuation; the tax legislation and regulations to which WSP is subject and the state of WSP’s benefit plans. If any of these assumptions prove to be inaccurate, WSP’s actual results could differ materially from those expressed or implied in forward-looking statements.

In evaluating these forward-looking statements, investors should specifically consider various risk factors, which, if realized, could cause WSP’s actual results to differ materially from those expressed or implied in forward-looking statements. Such risk factors include, but are not limited to: risks and uncertainties relating to the dilutive effect of the public on holders of Common Shares; the fact that the declaration of dividends on the Common Shares is at the discretion of the board of directors of WSP; the fact that the price at which the Offering Subscription Receipts are sold by the underwriters may be less than the Offering price; WSP’s inability to successfully integrate POWER’s business upon completion of the Acquisition; the possible delay or failure to close the Acquisition; the potential failure to realize anticipated benefits from the Acquisition; the potential failure to obtain the shareholder approval and regulatory approval in the U.S. in a timely manner, or at all; the currency exchange risk and foreign currency exposure related to the purchase price of the Acquisition; WSP’s reliance upon publicly available information and information provided by POWER in connection with the Acquisition; risks associated with historical and pro forma financial information; potential undisclosed costs or liabilities associated with the Acquisition; WSP’s or POWER’s businesses being adversely impacted during the pendency of the Acquisition; and change of control and other similar provisions and fees, as well as other factors discussed or referred to in the “Risk Factors” section of WSP’s Management and Discussion Analysis for the financial year ended December 31, 2023 (the “Annual MD&A”), and WSP’s Management’s Discussion and Analysis for the second quarter and six-month period ended June 29, 2024 (the “Q2 MD&A”) and filed on SEDAR+ at www.sedarplus.ca, as well as other risks detailed from time to time in reports filed by the Corporation with securities regulators or securities commissions or other documents that the Corporation makes public, which may cause events or results to differ materially from the results expressed or implied in any forward-looking statement.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. WSP cautions that the foregoing list of risk factors is not exhaustive and other unknown or unpredictable factors could have also a material adverse effect on the performance or results of WSP or POWER. Actual results and events may be significantly different from what we currently expect because of the risks associated with our business, industry and global economy and of the assumptions made in relation to these risks. As such, there can be no assurance that actual results will be consistent with forward-looking statements. The completion of the Acquisition is subject to customary closing conditions, termination rights and other risks and uncertainties, including, without limitation and as applicable, shareholder approval and regulatory approval in the U.S., and there can be no assurance that the Acquisition will be completed. There can also be no assurance that if the Acquisition is completed, the strategic and financial benefits expected to result from the Acquisition will be realized.

To the extent any forward-looking statement in this press release constitutes financial outlook, within the meaning of applicable Canadian securities laws, such information is intended to provide investors with information regarding the Corporation, including the Corporation’s assessment of future financial plans, and may not be appropriate for other purposes. Financial outlook (including assumptions about future events, including economic conditions and proposed courses of action, based on the Corporation’s assessment of the relevant information currently available), as with forward-looking statements generally, is based on current estimates, expectations and assumptions and is subject to inherent risks and uncertainties and other factors. Any financial outlook included in this press release has been prepared by, and is the responsibility of, Management. PricewaterhouseCoopers LLP, the independent auditor of the Corporation, has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to any such financial outlook and, accordingly, PricewaterhouseCoopers LLP does not express an opinion with respect thereto. The PricewaterhouseCoopers LLP report that will be incorporated by reference in the Prospectus Supplement relates to the Corporation’s previously issued financial statements for the year ended December 31, 2023. It does not extend to any financial outlook and should not be read to do so.

Differences could arise because of events announced or completed after the date of this press release. Except to the extent required by applicable law, the Corporation assumes no obligation to publicly update or revise any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release describe the Corporation’s expectations as of the date of this press release (unless otherwise specified) and, accordingly, are subject to change after such date.

All of the forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. Readers are also referred to cautionary language regarding forward-looking statements included in the Prospectus Supplement.

Additional Underlying Assumptions

The Corporation cautions that the assumptions used to prepare the estimated 2026 Accretion, 2024 POWER Pre-IFRS 16 Adjusted EBITDA, 2024 POWER Post-IFRS 16 Adjusted EBITDA and WSP’s Pro forma net debt to adjusted EBITDA ratio upon closing of the Acquisition and within 12 months following closing of the Acquisition could prove to be incorrect or inaccurate. Accordingly, the actual results could differ materially from the Corporation’s expectations as set out in this press release. The Corporation considered numerous economic and market assumptions regarding the foreign exchange rate, competition, political environment and economic performance of each region where the Corporation and POWER operate. In addition to the assumptions disclosed above under “Forward-Looking Statements”, the following assumptions were used to develop these forward-looking financial measures:

2026 Accretion:

• WSP’s net revenue3 organic growth of approximately the same level as the average of the last three years for each of the years until 2026 (WSP’s revenue and net revenue were $14,437.2 million and $10,897.0 million, respectively, for the financial year ended December 31, 2023);
• POWER’s net revenue3 organic growth in line with the last 3-year compound annual growth rate (“CAGR”) revenue growth and gradually reducing in 2025 and 2026 to mid-to-high single digit (POWER revenue and net revenue were approximately US$837.8 million and US$687.2 million, respectively for the financial year ended December 31, 2023);
• POWER’s Pre-IFRS 16 Adjusted EBITDA margin and Post-IFRS 16 Adjusted EBITDA margin expansion supported by a combination of levers, including utilization and pricing, where significant opportunity has been identified.
• Expected cost synergies of a minimum of approximately US$25 million are expected to be achieved by the end of 2026, with 50% expected to be realized in 2025.

2024 POWER Pre-IFRS 16 Adjusted EBITDA and 2024 POWER Post-IFRS 16 Adjusted EBITDA:

• POWER mid-teens organic revenue growth for the financial year ending December 31, 2024 in line with POWER’s actual performance for the first six months of the financial year ending December 31, 2024, including productivity and pricing improvements resulting in approximately 150 bps in POWER’s Pre-IFRS 16 Adjusted EBITDA margin3 and POWER’s Post-IFRS 16 Adjusted EBITDA margin3;
• POWER Pre-IFRS 16 Adjusted EBITDA margin expansion supported by a combination of levers, including utilization and pricing, where significant opportunity has been identified;
• Annual cost savings from a $7.0 million non-recurring expense incurred during the financial year ended December 31, 2023 (representing an estimated positive impact of approximately 100 bps on POWER’s Pre-IFRS 16 Adjusted EBITDA margin and POWER’s Post-IFRS 16 Adjusted EBITDA margin);

WSP’s Pro forma net debt to Adjusted EBITDA ratio (upon closing of the Acquisition and within 12 months following closing of the Acquisition):

• Acquisition closing date assumed to be September 30, 2024;
• WSP’s Adjusted EBITDA3 for the financial year ending December 31, 2024 ranging from $2.1 billion to $2.14 billion8;
• POWER’s Post-IFRS 16 Adjusted EBITDA for the financial year ending December 31, 2024 being in line with POWER’s actual performance for the first six months of the financial year ending December 31, 2024;
• All elements of WSP’s consolidated statements of cash flows for the applicable period being in line with those generally experienced by WSP in comparable periods;
• WSP net revenue organic growth, calculated on a constant currency basis, between 6% and 8% for the financial year ending December 31, 2024 (WSP net revenue, calculated on a constant currency basis, was $10,897.0 million for the financial year ended December 31, 2023, and WSP revenue was $14,437.2 million for the financial year ended December 31, 2023); and
• POWER cash flow in the fourth quarter of the financial year ending December 31, 2024 being in line with POWER Pre-IFRS 16 Adjusted EBITDA for the financial year ending December 31, 2024.

NON-IFRS AND OTHER FINANCIAL MEASURESThe Corporation reports its financial results in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). In this press release, the following non-IFRS and other financial measures are used by the Corporation: adjusted EBITDA, net revenue, adjusted net earnings per share, 2026 Accretion and net debt to adjusted EBITDA ratio. Other than in respect of 2026 Accretion which is defined below, explanations of the composition and usefulness of these measures can be found in section 19 titled “Glossary of segment reporting measures, non-IFRS and other financial measures” of WSP’s Q2 MD&A, which section is incorporated by reference in this press release, as posted on WSP’s website at www.WSP.com, and filed on SEDAR+ at www.sedarplus.ca. Reconciliations of such measures to the most directly comparable measure under IFRS can be found in section 8, “Financial Review” and section 9, “Liquidity” in WSP’s Annual MD&A and Q2 MD&A, which sections are also incorporated by reference in this press release.

The information in this press release also includes non-U.S. GAAP (as defined below) financial measures and non-U.S. GAAP financial ratios with respect to POWER, namely POWER Net Revenues, POWER Pre-IFRS 16 Adjusted EBITDA, POWER Post-IFRS 16 Adjusted EBITDA, POWER Pre-IFRS 16 Adjusted EBITDA margin and POWER Post-IFRS 16 Adjusted EBITDA margin. These measures are not recognized measures under U.S. GAAP and do not have standardized meanings prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies, including WSP’s. Rather, these measures are provided as additional information to complement U.S. GAAP measures by providing further understanding of POWER’s results of operations. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of POWER’s financial statements reported under U.S. GAAP. WSP discloses POWER Pre-IFRS 16 Adjusted EBITDA because this non-U.S. GAAP measure is a key measure used by POWER to evaluate its business, measure its operating performance and make strategic decisions. WSP believes POWER Pre-IFRS 16 Adjusted EBITDA is useful for investors and others in understanding and evaluating its operations results in the same manner as POWER. However, POWER Pre-IFRS 16 Adjusted EBITDA is not a financial measure calculated in accordance with U.S. GAAP and should not be considered as a substitute for net income, income before income taxes, or any other operating performance measure calculated in accordance with U.S. GAAP. Using this non-U.S. GAAP financial measure to analyze POWER’s business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in its industry may report measures titled adjusted EBITDA or similar measures, such non-U.S. GAAP financial measures may be calculated differently from how POWER calculates non-U.S. GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider these non-U.S. GAAP financial measures alongside other financial performance measures, including net income and POWER’s other financial results presented in accordance with U.S. GAAP.

These measures are defined as follows:

• “POWER Net revenues” has the same definition as WSP’s definition of “net revenues,” being revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from clients.
• “POWER Pre-IFRS 16 Adjusted EBITDA” is defined as POWER net income excluding income tax, interest expense, interest income, depreciation and amortization and unusual items.
• “POWER Post-IFRS 16 Adjusted EBITDA” is defined as POWER Pre-IFRS 16 Adjusted EBITDA adjusted for operating lease costs.
• “POWER Pre-IFRS 16 Adjusted EBITDA margin” is defined as POWER Pre-IFRS 16 Adjusted EBITDA, divided by POWER Net revenues.
• “POWER Post-IFRS 16 Adjusted EBITDA margin” is defined as POWER Post-IFRS 16 Adjusted EBITDA, divided by POWER Net revenues.

WSP uses the following non-IFRS and other financial measures in this press release with respect to the Corporation, in each case on a pro-forma basis after giving effect to the Acquisition, the Offering, the Concurrent Private Placement, advances and funds expected to be drawn under the New Term Loans and any Acquisition-related adjustments, as if each had been completed at the beginning of the relevant period:

• “WSP Pro forma adjusted EBITDA” for the trailing twelve-month period ending December 31, 2024 for the purpose of calculating the WSP Pro forma net debt to adjusted EBITDA ratio;
• “WSP Pro forma net debt to adjusted EBITDA ratio”;
• “WSP Pro forma net revenues.”

“2026 Accretion” or “accretive” is calculated as the increase in WSP’s forecasted pro forma adjusted net earnings per share for the financial year ending December 31, 2026 after giving effect to the Acquisition, the Offering, the Concurrent Private Placement, advances and funds expected to be drawn under the New Term Loans and any Acquisition-related adjustments, as compared to WSP’s forecasted adjusted net earnings per share for the financial year ending December 31, 2026 on a stand-alone basis. Please also refer to “Additional Underlying Assumptions” above.

The following tables set forth a detailed reconciliation, if applicable, of the non-IFRS and other financial measures used in this press release to the nearest or most equivalent IFRS measures.

A reconciliation of POWER net income (loss) to POWER Pre-IFRS 16 Adjusted EBITDA and POWER Post-IFRS 16 Adjusted EBITDA for the year ended December 31, 2023 is provided in the table below:

(in million U.S. dollars)	Year ended December 31, 2023
Net income	52.4
Depreciation and amortization	13.7
Interest income	(2.5	)
Interest expense	4.2
Income taxes	15.6
Unusual items	3.4
POWER Pre-IFRS 16 Adjusted EBITDA	86.8
Operating lease costs (IFRS 16 Adjustment)	12.1
POWER Post-IFRS 16 Adjusted EBITDA	98.9

A reconciliation of POWER revenues to POWER Net revenues for the year ended December 31, 2023 is provided in the table below:

(in million U.S. dollars)	Year ended December 31, 2023
Revenues	837.8
Subconsultants and direct costs	(150.6	)
POWER Net revenues	687.2

A reconciliation of WSP’s Pro forma net revenues for the year ended December 31, 2023 is provided in the table below:

(in million dollars)	Year ended December 31, 2023
WSP Net revenues*	10,897.0
POWER Net revenues (converted into Canadian dollars)	927.8
WSP Pro Forma Net Revenues	11,824.8

*Total of segments measure

A reconciliation of WSP’s Pro forma Adjusted EBITDA for the year ended December 31, 2023 is provided in the table below:

(in million dollars)	Year ended December 31, 2023
WSP Adjusted EBITDA	1,921.3
POWER Post-IFRS 16 Adjusted EBITDA (converted into Canadian dollars)	133.5
WSP Pro Forma Adjusted EBITDA	2,054.8

The non-IFRS and other financial measures used in this press release do not have a standardized meaning as prescribed by IFRS. Management of the Corporation believes that these non-IFRS and other financial measures provide useful information to investors regarding the financial condition and results of operations of the Corporation and the other entities referenced herein as they provide additional key metrics of their performance. Refer to section 19 “Glossary of segment reporting, non-IFRS and other financial measures” of the Q2 MD&A, which section is incorporated by reference in this press release, as posted on WSP’s website at www.WSP.com, and filed on SEDAR+ at www.sedarplus.ca, for more information on the usefulness to investors of each such measures. These non-IFRS and other financial measures are not recognized under IFRS and may differ from similarly-named measures as reported by other issuers, and accordingly may not be comparable. These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.

PRESENTATION OF FINANCIAL INFORMATION

Unless otherwise indicated, where financial information of POWER has been converted from U.S. dollars to Canadian dollars for purposes of comparison to and combination with, financial information of WSP, U.S. dollars have been converted to Canadian dollars at an exchange rate of $1.35 per US$1.00.

POWER’s financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). IFRS differs in certain material respects from U.S. GAAP. The financial information of POWER presented in this press release has not been adjusted to give effect to the differences between U.S. GAAP and IFRS or to accounting policies that comply with IFRS and as applied by WSP, nor has such financial information been conformed from accounting principles under U.S. GAAP to IFRS as issued by the IASB, and thus may not be directly comparable to WSP’s financial information prepared in accordance with IFRS. We have assessed the differences between U.S. GAAP and IFRS for POWER and have determined the impact to be immaterial except for Lease Accounting. Under IFRS, Lease Accounting is governed by IFRS 16 while under U.S. GAAP, it is governed by Accounting Standard Codification (ASC) 842. While similar with regards to the recognition of leases on the balance sheet, the standards have many differences in application. However, the impact of the differences between U.S. GAAP and IFRS for Lease Accounting on the pro forma financial measures presented in this document, namely WSP Pro Forma Net Revenue and WSP Pro Forma Adjusted EBITDA, is immaterial, such that no adjustments would be necessary.

NO OFFER OR SOLICITATIONNo securities regulatory authority has either approved or disapproved the contents of this press release.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

Alain MichaudChief Financial OfficerWSP Global Inc.alain.michaud@wsp.com      Phone: 438-843-7317

1 Source: BloombergNEF – New Energy Outlook (NEO) https://about.bnef.com/new-energy-outlook-series/2 Last twelve-months ended June 29, 2024 for WSP’s Revenues by Sector and last twelve-months ended April 30, 2024 for POWER’s Revenue by Sector. US/CAD exchange rate used to convert the POWER Revenue by Sector into Canadian dollars is 1.353 Non-IFRS financial measure or non-IFRS financial ratio without a standardized definition under IFRS, which may not be comparable to similar measures or ratios used by other issuers. Please refer to “Non-IFRS and other financial measures” in this press release.4 POWER’s Pre-IFRS 16 Adjusted EBITDA in 2023 was US$86.8 million (approximately $117.2 million) (POWER’s net income in 2023 was US$52.4 million (approximately $70.7 million)).5 WSP`s basic net earnings per share attributable to shareholders and adjusted net earnings per share3 were $4.41 and $6.90, respectively, for the financial year ended December 31, 2023.6 The Corporation’s assessment of potential synergy opportunities for the Acquisition is primarily based on the information received as part of its due diligence investigation of POWER, its own outside-in perspectives, previous acquisition experience and publicly available information.7 WSP’s ’Adjusted EBITDA5 and Earnings before net financing expense and income taxes were $1,921.3 million and $947,5 million, respectively, for the financial year ended December 31, 2023. WSP’s net debt to Adjusted EBITDA ratio5 was 1.7x on June 29, 2024.8 The target ranges were prepared assuming no fluctuations in foreign exchange rates in markets in which the Corporation operates. The first quarter of 2024 will have two less billable days than the first quarter of 2023, while the fourth quarter of 2024 will have two additional billable days than the fourth quarter of 2023. The impact on the quarterly organic growth is expected to be approximately 3% in each of Q1 2024 (negative ~3%) and Q4 2024 (positive ~3%). The Corporation anticipates organic growth in net revenues by segment will be in the mid-to-high-single digits in its Canadian operations and Americas operations and the mid-single digits in its EMEIA and APAC operations. Head office corporate costs in 2024 are expected to be between $120 million and $135 million.