Science Group shares rocket after Ricardo sale clinches £53.5m cash coup

Consulting group WSP Global Inc. – listed in Toronto – is set to acquire Ricardo for around £281m. Ricardo directors have unanimously backed the deal.

Ricardo is a global strategic, environmental, and engineering consulting company with over 100 years of engineering excellence and approximately 2,700 employees in more than 20 countries.

Science Group has been steadily building its stake in Ricardo which is now set to deliver a handsome dividend. Science Group has agreed to sell most of its stake in Ricardo plc to WSP Group at 430p per share. The transaction is expected to generate c £53.5 million in cash before the end of June.

Between February 16 and May 27, Science Group had acquired a 21.8 per cent stake in Ricardo at an average price of 239p per share. The company expects to realise a pre-tax net return of around 70 per cent on its investment.

WSP’s offer is said to represent a 102 per cent premium to Ricardo’s share price of 213 pence before Science Group began buying up stock.

Science Group said it supports the WSP offer for Ricardo and plans to retain the proceeds for future strategic investments and corporate opportunities. It says it will maintain a small position in Ricardo following the transaction.

WSP Group is one of the world's leading professional services firms, with approximately 72,600 professionals in over 50 countries, providing engineering, strategic advisory and science-based expertise to clients in the transportation, infrastructure, environment, building, energy, water and mining and metals sectors. Ricardo has facilities UK wide including in Harwell, Oxfordshire but is a global force.

Ricardo's EE business line is highly specialised and differentiated from the typical environmental consultancies. It has niche areas of high value expertise including policy, strategy and economics; air quality, nature and water management; corporate sustainability and energy market modelling.

Its Rail business line has global expertise supporting leading OEMs in the rail sector and is known as a leading name specialising in high value rail engineering and assurance services.

For its part, the acquisition further strengthens the WSP Group's geographic presence, particularly in the UK, Australia and the Netherlands.