WSP CEO Alexandre L’Heureux said that policy uncertainty stemming from President Donald Trump’s administration is impacting the market and will likely keep merger and acquisition activity quiet for the first half of the year.
“On one end, with this new administration, I think the investment community was hopeful for more deregulation and therefore fostering more of an environment for merger and acquisition,” L’Heureux said in a Thursday earnings call. “The flip side of this is that when you are creating an unstable environment, people tend to take a pause. So I feel you have two competing forces right now taking place in the marketplace.”
Alexandre L’Heureux
Despite the relative inactivity right now, that doesn’t mean more M&As aren’t on the horizon for the Montreal-based building giant, according to L’Heureux. During WSP’s previous three-year strategic cycle, it made 15 acquisitions and added about 20,000 people to its headcount. Most recently, the firm bought Hailey, Idaho-based Power Engineers in August 2024 for $1.78 billion.
“I do believe that if we can gain more stability in the marketplace, I think that the market is poised for a lot of activities in the coming years, and we intend WSP to actively participate in that,” L’Heureux said.
He also said that despite the lack of clarity at the moment, the company is “feeling extremely good around the markets in which we operate at the moment, both in the U.S. and in Canada.”
“High level, I feel that there is a bilateral support on both sides of the aisle, by the Democrats and Republicans, around infrastructure,” L’Heureux said. “I feel that there’s some commitment to infrastructure, and that I believe will continue to be strong in 2025.”
Microsoft partnership to sharpen tech focus
WSP announced a multi-year partnership with Microsoft as the firm embarks on a new tech-focused strategic cycle.
In its 2025-2027 action plan, the company aims to drive greater innovation and meaningfully invest in digital, L’Heureux said. The partnership with Microsoft will help it achieve those goals and represents a potential combined financial commitment and investment exceeding $1 billion, according to the firm.
“We reaffirm this intention with a groundbreaking new seven-year partnership with Microsoft to accelerate the digitalization of the architecture, engineering and construction industry,” said L’Heureux. “By combining our deep engineering and scientific expertise with Microsoft’s best-in-class digital and AI technologies, we can drive value, focus innovation and achieve exceptional results.”
As part of the deal, WSP is designating Microsoft as a preferred partner for digital and AI services, including a global expansion of the Copilot AI chatbot, according to a Feb. 13 announcement. Microsoft, meanwhile, will continue to look to WSP for engineering and science consultancy.
Profit, revenue, backlog up
WSP reported revenues of 4.66 billion Canadian dollars ($3.23 billion) in the fourth quarter, up 25% from CA$3.72 billion in Q4 2023. For the full year, it saw revenues of CA$16.17 billion, up 12% from 2023.
The firm’s profits grew to CA$166.9 million in Q4 2024, a nearly 28% jump from the same period last year. Profits stood at CA$681.4 million for all of 2024, up about 24% from the previous year.
Backlog stood at CA$15.6 billion, a nearly 11% increase from CA$14.1 billion Q4 2023.
L’Heureux attributed the results to the firm’s strategic acquisitions, diversification and other planning. WSP still has ample opportunities to take market share, and its deep understanding of the natural and built environment provides a strategic advantage, he said.
“The world around us is changing rapidly,” L’Heureux said. “Megatrends such as the energy transition, urbanization and the digital revolution are reshaping our planet and increasing the demand for our expertise.”
