Arcadis signs deal to acquire DPS Group for €232 million

AMSTERDAM: Arcadis, the leading global design & consultancy organization for natural and built assets, has entered into an agreement to acquire DPS Group, a leading consultancy, engineering and construction management company for Life Sciences and Semiconductor facilities.

The acquisition of DPS for a cash consideration of €232 million or an enterprise value of around €295m represents 8.1x DPS’ estimated 2022 EBITDA, or 6.7x post synergies.

The transaction will be fully debt financed. The transaction is subject to customary completion conditions, including regulatory approvals. Arcadis expects the transaction to close before the end of 2022.

DPS Group has a strong presence in North America and Europe, and long-standing client relationships with the world’s largest pharmaceutical and semiconductor manufacturing companies.

With this acquisition, Arcadis will achieve a leading global position in the two high growth manufacturing markets and create a further enhanced and integrated full-service offering.

Peter Oosterveer, Arcadis’ Chief Executive Officer said: “The intended acquisition of DPS Group marks another significant milestone in the implementation of Arcadis’ 2021-2023 ‘Maximizing Impact’ strategy and our focus on scaling our business and delivering an enhanced service offering to clients.

Together with DPS’ team of 2,850 talented consultants, process engineers and program managers across the U.S. and Europe, we can build on Arcadis’ success in the delivery of high-tech facilities. Our ambition is to be a global leader in the high growth and resilient Life Sciences and Semiconductor manufacturing markets.

The combined strengths of both our organizations will allow us to improve the quality of life for the communities we all serve, while amplifying our ability to deliver a full service and seamless offering to new and existing clients across the world.”

Frank Keogh, DPS Chief Executive Officer said: “Today marks an important step in the evolution of DPS. Over the past years we have grown our business into a leader in the Life Sciences and Semiconductor manufacturing sectors. I am proud to be joining forces with Arcadis. Together with Arcadis we will be able to offer a more comprehensive set of solutions for our clients and continue to grow our business.”

DPS is headquartered in Ireland with over 2,850 highly skilled employees in the U.S. and Europe. It generated €289 million of net revenues in 2021, with a net revenue growth CAGR of 21% between 2019 and 2021.

It is a leading provider of project services to global leading clients in pharmaceutical, biotechnology, novel therapy, medical technologies and semiconductor manufacturing.

These sectors are expected to achieve double digit growth in years to come following public policy driven investments – such as the European and the U.S. Chips Acts – and private investments, as clients look to increase manufacturing capacities across the globe, resulting in large investments in the U.S. and Europe specifically.

DPS’ consultancy, engineering and construction management activities are highly complementary to Arcadis’; Arcadis Places currently provides Life Sciences clients with services including the management of capital expenditure programs for workplaces, R&D facilities and utilities and Arcadis Resilience supports Life Sciences clients in site restoration, sustainability advisory and net zero solutions.

DPS offers services across the different project phases and is particularly strong in manufacturing engineering and process design. The Arcadis-DPS combination will provide clients with a one-stop shop, full-service provider. The increased size will drive higher win rates on larger projects, in a market that increasingly prefers to deal with a single trusted advisor, given the complex, regulatory driven market requirements.

In addition, Arcadis is expected to leverage DPS’ manufacturing engineering skills to industrial manufacturing clients such as the high growth EV battery gigafactories. DPS and Arcadis have a history of successful collaboration, which was demonstrated by the delivery of multiple large pharmaceutical clients’ facilities.

Cost synergies are estimated at €8 million, or 2.8% of the 2021 revenues, expected to be fully realized within three years after the closing date, and driven by improved operational efficiencies and rationalization of organizational design.