CTI Engineering set to acquire Waterman Group for £43m

Waterman Group is set to be bought by Japanese engineering giant CTI Engineering after the two company’s boards reached agreement on the terms of a recommended cash offer to be made by CTI to acquire the UK consultancy business.

Under the terms of the offer, Waterman shareholders will receive 140p per share which represents a premium of approximately 83% on Waterman’s closing share price of 76.5p on 8 May 2017. The CTI offer values Waterman at approximately £43 million and CTI will finance the purchase from its existing cash resources. Waterman directors have unanimously agreed to recommend that shareholders accept the offer.

Coming hard on the heels of Atkins’ £2.1bn takeover by SNC-Lavalin, the Waterman Group acquisition is another example of a UK consultancy brand name being acquired by an international engineering group.

Founded in 1952, Waterman has been listed on the London Stock Exchange since 1988. The company has grown into a leading engineering and environmental consultancy with offices throughout the UK and in Australia and Ireland. 

CTI is the oldest of Japan’s top three ranked major consulting engineering companies and has had a had a full listing on the Tokyo Stock Exchange since 1996. CTI works closely with both national and local governments in Japan as a consulting engineer on major infrastructure projects, including dams, bridges and roads. In addition to its offices in Japan, CTI has offices in Islamabad, Yangon, Phnom Penh, Jakarta, Manila, Ulaanbaatar, Wuhan, Guangzhou and Bishkek, and has worked on infrastructure projects in Asia, Africa and Central America. 

Commenting on the offer, Michael Baker, chairman of Waterman, said: “On behalf of the Waterman Board, I am pleased to announce CTI’s recommended cash offer to our shareholders. Having exceeded our previously declared financial objectives over the three year period to 30 June 2016, Waterman announced its aspiration to improve the adjusted operating profit margin to six per cent over the next three years and remains strongly positioned in its core markets, generating high levels of repeat business from blue-chip clients. 

“However, whilst for the reasons set out above the Waterman board believes that Waterman would continue to have a strong independent future, we also believe that the offer from CTI represents an attractive and certain value in cash today for Waterman shareholders, reflecting the high quality of the business, its people, market position and future prospects. The Waterman board believes that the CTI proposal provides considerable opportunities for our people and enhances our capabilities and expertise in several key markets, including highways and flood defence. In particular, the proposal for Waterman to continue to operate as an independent business within the CTI Group is compelling for both our clients and our people.”

Kazuo Murata, president of CTI, said: “I believe Waterman is a highly respected company with a long tradition in the engineering industry. It has a reputation for providing innovative, economical and sustainable engineering solutions within a client-focused approach. Waterman should expand our technical capacity to serve clients in the property and building construction sectors internationally. Waterman’s knowledge and experience of working with both private and public sector clients in English speaking markets should provide an excellent strategic fit with our group of companies as we seek to take advantage of the opportunities that exist beyond our domestic market.

“Our investment in Waterman is a clear sign of our belief in the United Kingdom as a place to do business and its strategic importance in serving international markets. We are also excited about the possibility to build upon Waterman’s foothold in the Australian market and, through its office in Ireland, within Europe. We intend to support Waterman’s management team so that they can operate Waterman collaboratively within CTI’s group of companies.”

The offer for Waterman will be CTI’s first acquisition outside Japan and is part of the implementation of the company’s ten-year strategic plan, known as Clavis 2025, to expand CTI’s client base and geographical markets.

If you would like to contact Andy Walker about this, or any other story, please email