Engineering services and consulting company Tetra Tech (NASDAQ:TTEK) is set to acquire leading European professional services firm RPS Group in a move that will further strengthen TTEK’s footing in the domain of renewable energy, environmental management, and data analytics.
The 222 pence per share transaction is expected to close by the end of this year. The deal will be accretive to TTEK’s earnings per share by mid-to high-teens percent about 12 months after the deal closes.
The acquisition will bring on board 5,000 RPS associates from Europe, the United Kingdom, Asia Pacific, and North America to establish a top-of-the-game consultancy in water, environment, sustainable infrastructure, and energy transformation operating globally.
TTEK’s has a solid track record of making successful acquisitions that have expanded the company’s product lines and enhanced its market presence. This year itself, the company has already made two acquisitions in March — advanced water management and geotechnical analytics firm Piteau Associates, and oceanic and ecological data analytics provider Axiom Data Science.
Will Tetra Tech’s stock go up or down?
On Wall Street, the average price target for TTEK currently stands at $174, meaning the stock has the potential to grow by 37%. Moreover, analysts are cautiously optimistic about the stock, which has a Moderate Buy rating on the Street based on one Buy and two Holds.
Bottom-Line
Tetra Tech’s efforts to bolster its bottom line make it an attractive stock for long-term investors. Moreover, since the bottom line is doing well, TTEK is able to pursue diligent capital-deployment strategies like dividend hikes and share repurchases to consistently boost shareholders’ wealth.
