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Tetra Tech (TTEK) Acquires UK-Based WYG, Expands Presence

Zacks Equity Research

Tetra Tech, Inc. TTEK recently completed the takeover of the U.K. based consulting firm, WYG. Notably, Tetra Tech’s earlier offer (in May 2019) of acquiring all of the outstanding shares of WYG became effective, following which WYG shares stopped trading on the London Stock Exchange.

WYG is the provider of consulting and engineering solutions for various sectors like planning, transport, infrastructure, architecture, surveying, urban design, asset management, and international development among others. The company, which employs about 1,600 employees, has a stronghold in more than 30 countries across the U.K., Europe, Asia and Africa.

In fact, apart from extending its geographic presence, the buyout will enable Tetra Tech to strengthen its international development business, for the U.K.’s Department for International Development and the European Union. Notably, WYG’s proficiency in water and environmental services, as well as infrastructure and program management, will allow Tetra Tech to offer very comprehensive service offerings to customers.

Existing Business Scenario

Tetra Tech remains bullish about its growth across all four client sectors, namely, U.S. federal, U.S. state and local, the U.S. commercial, and finally international. Based on growth rate forecast for the U.S. federal markets, the company expects sales from these markets to grow at 5% rate for fiscal 2019.

In the past three months, the company has gained 34.7% compared with the industry’s growth of 9.1%.

 

 

In addition, Tetra Tech expects that solid opportunities across the globe will boost its international revenues. For fiscal 2019 (ending Sep 30, 2019) the company expects 10% growth rate with its international clients, particularly in Canada and the Asia Pacific region. In addition, infrastructure and industrial work in Canada, and commercial and environmental programs in the United States are likely to aid its top line.

Zacks Rank & Other Key Picks

Tetra Tech currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the Zacks Industrial Products sector are CECO Environmental Corporation CECE, Energy Recovery, Inc. ERII and Brady Corporation BRC. While CECO Environmental currently sports a Zacks Rank #1 (Strong Buy), Energy Recovery and Brady carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CECO Environmental delivered a positive average earnings surprise of 25.00% in the trailing four quarters.

Energy Recovery pulled off a positive average earnings surprise of 225.00% in the trailing four quarters.

Brady pulled off a positive average earnings surprise of 9.22% in the trailing four quarters.

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