The sale of Irish engineering and construction consultancy group DPS for €232m in cash will see massive windfalls for CEO Frank Keogh and chief financial officer Eddie Kent.
They are the main beneficiaries of the deal, which is expected to close by the end of this year.
Chairman Donal Roche and his family will also reap money from the sale. Mr Roche is a former managing partner of law firm Matheson.
Dutch global design and consultancy firm Arcadis said that it has agreed to buy the Ireland-headquartered firm for an enterprise value of €295m, which includes the cash element.
DPS generated net revenues of €289m in 2021, according to Arcadis, which added that the acquisition price represents 8.1 times the Irish company’s expected earnings before interest, tax, depreciation and amortisation this year.
The latest set of publicly available accounts for DPS show that it generated total revenues of €395.7m in 2020, when it made a pre-tax profit of €11.4m.
The figures compared to €274.2m and €6.5m respectively in the previous financial year. It paid a total €1m dividend to shareholders that year, on top of a €1m dividend the year before. Its revenue has risen more than tenfold in the past 20 years.
A company called DPS Engineering Trustee holds a significant amount of shares in the main holding company. That company is controlled by Mr Keogh and Mr Kent.
Mr Keogh is a former operations director of DPS and was appointed to the board in 1996. He was appointed chief executive in 2010. Eddie Kent joined in 2001 as financial controller and was appointed finance director in 2008.
DPS employs close to 3,000 people across Europe and the United States. It works with clients involved in pharmaceuticals, medical technologies, biotechnology and semiconductor manufacturing. The projects have included cell therapy and gene therapy facilities. It also provides services to other sectors.
Arcadis, which is headquartered in Amsterdam, employs more than 33,000 people in 70 countries and recorded sales of €3.8bn last year.
Peter Oosterveer, CEO of Arcadis, said the acquisition of DPS will mark “another significant milestone” for the Dutch group. He said the group’s ambition is to be a global leader in the high growth and resilient life sciences and semiconductor manufacturing markets.
An estimated €8m in cost synergies, or the equivalent of 2.8pc of DPS’s 2021 revenues, are expected to be fully realised within three years of the closing date of the deal. Arcadis said those synergies will be achieved through “improved operational efficiencies and rationalisation of organisational design”.
Arcadis said the acquisition of DPS will be full debt financed. An existing bridge loan facility for the acquisition of IBI Group has been increased.
“As part of its financing strategy, Arcadis has engaged with Standard & Poor’s to obtain a credit rating and expects to receive an investment grade credit rating, pro forma for the IBI and DPS transactions,” noted the Dutch group.