425: Acuren to Merge with NV5, Creating $2 Billion Revenue Powerhouse

Acuren Corporation and NV5 Global, Inc. have announced a definitive agreement to merge, forming a leading $2 billion revenue Testing, Inspection, Certification and Compliance (TICC) and engineering services company.

Summary

• Acuren Corporation and NV5 Global, Inc. have entered into a definitive merger agreement.
• The merger will create a combined company with $2 billion in revenue.
• NV5 stockholders will receive $23.00 per share, consisting of $10.00 in cash and $13.00 in Acuren common stock, representing a 32% premium to NV5's 30-day VWAP as of May 14, 2025.
• The total consideration for NV5 is approximately $1.7 billion, representing approximately 10.3x 2025E consensus adjusted EBITDA.
• Upon closing, current Acuren stockholders will own approximately 60%, and current NV5 stockholders will own approximately 40% of the combined company, subject to adjustment based on the price of Acuren shares at closing.
• The combined company is expected to generate $350 million in adjusted EBITDA post synergies.
• The merger is expected to be immediately accretive to Acuren stockholders, with $20 million in near-term cost synergies.
• Dickerson Wright, Executive Chairman and Founder of NV5, and Ben Heraud, CEO of NV5, are expected to join the Board of Acuren along with one additional mutually agreed independent director.
• The transaction is subject to stockholder and regulatory approvals and is expected to close in the second half of 2025.
• The cash portion of the acquisition will be funded by a fully committed $850.0 million term-loan facility and cash on hand.

Sentiment

Score: 8

Explanation: The document conveys a positive outlook due to the strategic benefits of the merger, expected synergies, and accretion to Acuren stockholders. The management commentary is optimistic, and the financial details suggest a well-structured transaction.

Positives

• The merger creates a larger, more diversified company with a broader service offering.
• The transaction is expected to be immediately accretive to Acuren stockholders.
• Significant cost synergies are anticipated, enhancing profitability.
• The combined company will have a strong cash flow profile, enabling debt reduction and further growth.
• The addition of NV5's leadership to Acuren's Board is expected to bring valuable expertise.

Risks

• The transaction is subject to stockholder and regulatory approvals, which may not be obtained.
• Integration of the two companies may present challenges and may not be as successful as anticipated.
• The expected cost synergies may not be fully realized.
• Changes in market conditions or the combined company's performance could impact the expected financial benefits of the merger.
• The floating exchange ratio is subject to a floor and ceiling which may impact the final consideration.

Future Outlook

The combined company anticipates strong organic growth, limited cyclicality, and high free cash flow conversion, with a long-term goal to strengthen the company through organic growth and continued accretive acquisitions.

Management Comments

• Robbie Franklin, Co-Chairman of Acuren, stated that the merger offers significant value for Acuren and NV5 stockholders and team members and creates new opportunities to expand and complement each other's business lines.
• Tal Pizzey, CEO of Acuren, noted that the merger is a transformative event and unlocks substantial opportunities to better serve customers and empower employees.
• Dickerson Wright, Executive Chairman and Founder of NV5, expressed his delight in bringing the two businesses together and the opportunity for NV5 shareholders to participate in the combined company's long-term value creation.

Industry Context

The merger creates a significant player in the Testing, Inspection, Certification and Compliance (TICC) and engineering services industry, which is characterized by recurring revenue streams and essential services.

Comparison to Industry Standards

• The transaction values NV5 at approximately 10.3x 2025E consensus adjusted EBITDA, which is within the range of comparable transactions in the TICC and engineering services sectors.
• Comparable companies in the TICC industry include Intertek, SGS, and Bureau Veritas, which trade at similar or higher multiples of EBITDA.
• Engineering services firms such as AECOM and Jacobs also serve as benchmarks for valuation and operational performance.

Management Changes

Stakeholder Impact

• Shareholders of NV5 will receive a premium for their shares and participate in the combined company's future growth.
• Shareholders of Acuren will benefit from the accretive nature of the transaction and the enhanced growth prospects of the combined company.
• Employees of both companies will have access to a broader range of opportunities and a more stable platform for growth.
• Customers will benefit from a wider range of services and a stronger, more capable partner.

Next Steps

• Obtain stockholder approvals from both Acuren and NV5.
• Secure regulatory approvals.
• Close the transaction, expected in the second half of 2025.
• Integrate the two companies and realize cost synergies.

Key Dates

Keywords

merger, acquisition, Acuren, NV5, TICC, engineering services, synergies, stockholders, EBITDA, revenue