how does the bal sheet look pro forma
WSP is buying TRC Companies for $3.3B cash, backed by Quebec's pension fund and an $850M financing. It is a big acquisition, and will make WSP the largest E&P company in the US, with a bigger focus on electrical utilities and energy firms. It adds $1.5B in revenue and $192M in EBITDA. It is accretive even before any synergistic cost savings. 8,000 employees will be added. Debt will go to about $7B and this compares with EBITDA which will be approaching $4B. Still OK from a risk perspective. Sales will go north of $17B with the deal. It is a big bite, but still only near 14% of market cap. WSP has had excellent success with prior acquisitions and we would expect integration to go well. The stock may bounce around with the financing, and year end positioning, but ultimately we think this is the right move for the company. US investors will like the 'energy' focus of the deal, considering the expected higher demand for energy needs in the next decade. We would remain comfortable as buyers here.