WSP Global Inc. announced Wednesday it will acquire the environment and infrastructure business of John Wood Group Plc for US$1.81 billion in a continued effort to expand its presence in the global environmental consulting sector.

WSP said the deal will bring in an additional US$830 million in revenue and immediately boost its adjusted earnings after closing, which is expected in the fourth quarter of this year. The Montreal-based engineering firm previously set a goal to achieve over $10 billion in net revenue by 2024. In 2021, WSP generated $7.87 billion in net revenue.

WSP President and Chief Executive Alexandre L’Heureux said in a release the deal will allow the company to expand in the United States, add expertise in the high growth water sector, and bolster its services for government clients.

One analyst who said he is “mostly positive” on the deal acknowledged it will check numerous strategic boxes, notably adding significant scale to WSP's earth and environment practice. However, he cautioned that the company may have paid too much. 

"While accretive, it would be roughly three multiple points higher than what WSP paid for Golder,” wrote Mark Neville, an analyst at Scotia Capital, in a note to clients. 

WSP purchased Golder, a global consulting firm with roughly 7,000 employees, for US$1.14 billion in April 2021. The move was a similar attempt to grow on the global stage, especially in the environmental sector.

Neville has a price target of $170.00 on WSP shares and a sector perform recommendation (the equivalent of a hold) on the stock.