Japanese industry consultancy, CTI Engineering, has agreed to purchase Waterman Group for approximately £43 million.

The deal involves CTI offering 140 pence in cash for each share of the UK consultancy. Both boards have agreed the deal and will now ask shareholders for approval.

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.

-- Advertisement --

"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, the President and Representative Director 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."

CTI is the oldest of Japan's top three ranked major consulting engineering companies. For the financial year ended 31 December 2016, it had annual turnover of £294m with a net profit of £9.8m.

Last year, Waterman generated £91.3m in revenue, with a pre-tax profit of £1.8m.

(LM)