While WSP Global (TSE:WSP) may be a widely recognized name in professional and engineering operations, it’s looking to expand its presence into energy. In fact, WSP agreed to buy Power Engineers, a U.S. consulting operation in the energy sector, for C$2.4 billion. Shareholders weren’t quite pleased, though, and they sent WSP shares down fractionally in Tuesday morning’s trading session.
The move is expected to provide WSP Global with access to the U.S. market and to the blue-chip consumer market, where it was previously somewhat underrepresented.
Since WSP Global is known for its engineering operations, being able to add another 4,000 trained engineers—those currently employed with Power Engineers—to its operation should be a net positive overall. It also should give WSP Global a foothold as it moves to become the biggest name in the world’s energy transition away from fossil fuels. Given that this transition is set to see $21.4 trillion in investment, it’s a big play, and even a small piece of that pie represents billions in income.
A Surprise Backer
While WSP Global likely could have completed the deal alone, it actually had a little help. Reports noted that Quebec’s chief pension manager, Caisse de dépôt et placement du Québec (CDPQ), contributed nearly 10% of the total, putting an extra $159 million into WSP Global to help finance the deal.
It certainly doesn’t hurt matters that CDPQ is actually WSP Global’s primary shareholder, and this latest round of investment is the eighth time that CDPQ has bought in on WSP Global’s operations. Given that earlier analysis from WSP’s CEO, Alexandre L’Heureux, noted that there were likely opportunities for growth ahead in the United States, that may have prompted CDPQ to buy in further.
Is WSP Global a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:WSP stock based on six Buys assigned in the past three months, as indicated by the graphic below. After a 13.72% rally in its share price over the past year, the average TSE:WSP price target of C$243 per share implies 14.16% upside potential.
See more TSE:WSP analyst ratings
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
