DEFM14A: Acuren and NV5 Global Announce Definitive Merger Agreement to Create Industry-Leading Engineering and Inspection Platform

Acuren Corporation and NV5 Global, Inc. have entered into a definitive merger agreement, valued at approximately $1.5 billion, to combine their businesses into a leading testing, inspection, and engineering platform.

Summary

• Acuren Corporation will acquire NV5 Global, Inc. in a cash and stock transaction valued at approximately $1.5 billion.
• NV5 stockholders will receive $10.00 in cash plus a variable number of Acuren common shares for each NV5 share, with the share component valued at $13.00, subject to a 10% collar based on Acuren's volume-weighted average price (VWAP).
• The implied value of the Merger Consideration was $23.00 per NV5 share as of May 14, 2025, and June 24, 2025.
• Following the merger, current Acuren stockholders are expected to own approximately 60% and NV5 stockholders approximately 40% of the combined company on a fully diluted basis.
• The combined entity is projected to have over $2 billion in revenue and approximately $350 million in adjusted EBITDA, with a 17.2% adjusted EBITDA margin, including synergies.
• The merger requires separate approvals from both Acuren and NV5 stockholders, with special meetings scheduled for July 31, 2025.
• Acuren's board unanimously recommends approval of the stock issuance, while NV5's board recommends approval of the merger, compensation, and adjournment proposals, despite a split vote within its Special Committee.

Sentiment

Score: 6

Explanation: The merger offers strategic benefits and synergies, but the dissenting NV5 board members' concerns about undervaluation, coupled with Acuren's disclosed material weaknesses in internal controls and the significant increase in debt, introduce notable risks and uncertainties. The implied valuation for NV5 is also below the average of its peers, suggesting it might not be the best possible outcome for NV5 shareholders.

Positives

• The merger creates an industry-leading testing, inspection, and engineering platform with complementary businesses.
• The combined company's total addressable market is expected to grow at mid-single to high-single digits.
• The merger is anticipated to provide strong organic growth and high free cash flow conversion.
• Approximately $20.0 million annually in administrative, insurance, and other operating cost synergies are expected.
• The transaction is expected to create significant commercial cross-sell opportunities for both companies.
• Acuren stockholders will maintain a meaningful majority ownership (approximately 60%) in the combined company, allowing participation in future value appreciation.
• The combined company is expected to be an acquirer of choice in future mergers and acquisitions due to increased scale and access to capital.
• The merger is projected to be accretive to Acuren stockholders' earnings per share in the first full year following completion.
• The combined company will have a more diversified global customer base and end markets, accelerating Acuren's diversification objectives.
• Financing commitments for the cash portion of the merger consideration were obtained on reasonable terms.
• NV5 has a 60-day 'go-shop' period (until July 14, 2025) to solicit alternative acquisition proposals.

Negatives

• The variable exchange ratio for the stock component means NV5 stockholders will not know the final value of the stock consideration at the time of voting, and it could be less than anticipated if Acuren's stock price declines.
• Two NV5 directors voted against the merger, citing undervaluation of NV5's assets and standalone plan, and concerns about timing due to recent macroeconomic events impacting NV5's stock price.
• Both Acuren and NV5 stockholders will experience reduced ownership percentages in the combined company.
• Significant transaction costs are expected, and there is a risk that anticipated synergies may not be fully realized or may take longer to achieve.
• Acuren's indebtedness will substantially increase upon completion of the merger, potentially heightening other risks and limiting future financial flexibility.
• The integration of two independent public companies is complex, costly, and time-consuming, potentially leading to disruptions or loss of key employees.
• The merger may trigger change-in-control provisions in existing agreements, potentially leading to terminations or renegotiated terms less favorable to NV5.
• Acuren has identified material weaknesses in its internal control over financial reporting, which may require significant investments to remediate.
• The merger agreement imposes restrictions on both companies' business activities prior to closing, potentially limiting new opportunities.
• Litigation related to the merger could result in injunctions or substantial costs.
• The merger may not qualify as a tax-free reorganization, leading to adverse tax consequences for NV5 stockholders.

Risks

• The Merger Consideration to be paid in exchange for each share of NV5 Common Stock is a combination of cash and shares of Acuren Common Stock based on a floating Exchange Ratio, subject to adjustment, meaning NV5 stockholders may receive consideration with a value that, at the time received, is less than anticipated.
• The NV5 Special Committee did not reach a conclusive determination on whether to recommend the offer to NV5's stockholders, with two members voting against it due to perceived undervaluation and timing concerns.
• Acuren stockholders and NV5 stockholders will have reduced ownership in the combined company post-merger.
• The merger is subject to a number of conditions, including stockholder and regulatory approvals, which, if not fulfilled or delayed, may prevent or delay completion.
• Failure to obtain required governmental clearances and authorizations (e.g., HSR Act, foreign direct investment laws) or the imposition of burdensome conditions could jeopardize the merger or reduce its anticipated benefits.
• Uncertainties associated with the merger may cause a loss of management personnel and other key employees of both Acuren and NV5.
• The business relationships of Acuren and NV5 may be disrupted due to uncertainty associated with the merger, potentially affecting customer, distributor, and supplier relationships.
• The Merger Agreement subjects Acuren and NV5 to restrictions on their respective business activities prior to the First Effective Time, which could prevent them from pursuing certain business opportunities.
• NV5 directors and executive officers have interests in the merger that may differ from, or be in addition to, the interests of general NV5 stockholders.
• The Merger Agreement limits Acuren's and NV5's ability to pursue alternative transactions, potentially discouraging other favorable proposals.
• Each of Acuren and NV5 are required to pay a termination fee (up to approximately $48.6 million) under certain circumstances, which could negatively impact their financial results.
• Failure to complete the merger could negatively impact Acuren's or NV5's stock price and have a material adverse effect on their results of operations, cash flows, and financial position.
• The shares of Acuren Common Stock to be received by NV5 stockholders will have different rights from shares of NV5 Common Stock.
• Completion of the merger may trigger change in control or other provisions in certain agreements to which NV5 is a party, including its existing credit facility.
• Acuren and NV5 are expected to incur significant transaction costs, which may be in excess of those anticipated.
• Litigation relating to the merger could result in an injunction preventing completion and/or substantial costs.
• If the merger does not qualify as a reorganization for U.S. federal income tax purposes, there may be adverse tax consequences for NV5 stockholders.
• The combined company may be unable to integrate the businesses of Acuren and NV5 successfully or realize the anticipated benefits and synergies.
• The market price of Acuren Common Stock may decline as a result of the merger if expected benefits are not achieved or if transaction costs are higher than expected.
• Acuren's indebtedness will increase upon completion of the merger, potentially heightening other risks and limiting future financial and operating flexibility.
• The unaudited pro forma financial information and prospective financial information are based on preliminary estimates and assumptions, and actual results may differ materially.
• The financial forecasts are based on various assumptions that may not be realized, and actual future results may vary materially.
• The potential synergies attributable to the merger may vary from expectations, and may not be realized fully or at all.
• The merger may result in a loss of customers, distributors, suppliers, vendors, landlords, joint venture partners, and other business partners, or termination of existing contracts.
• Acuren's governing documents designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions, which could limit stockholders' ability to obtain a favorable judicial forum.
• Acuren's revenues are heavily dependent on certain industries (e.g., chemical, pipeline, refinery), making it vulnerable to downturns in these sectors.
• Demand for Acuren's services is partially related to global oil supply and existing oil and gas refining sites, impacting client spending levels.
• Acuren operates in competitive markets, and inability to compete successfully could lead to market share loss and declining margins.
• Serious safety incidents, including fatalities and other serious injuries, may result from the use of Rope Access Technician (RAT) solutions, leading to litigation, increased regulation, and business loss.
• The success of Acuren's businesses depends on its ability to adopt new asset integrity solutions, increase functionality, and expand into adjacent service categories.
• Acuren's investments in new client markets involve significant risks and may not produce expected long-term benefits.
• If Acuren cannot implement commercially competitive services in a timely manner in response to market changes, client requirements, or technology trends, its business and results could be adversely affected.
• Acuren's unionized workforce and related obligations could adversely affect its operations, including potential strikes or work stoppages.
• No assurances can be made that Acuren will be successful in hiring or retaining members of a skilled technical workforce.
• Failure to maintain a safe work environment could lead to losses, loss of business, and increased operating costs.
• No assurances can be made that Acuren will be successful in maintaining or renewing its contracts with clients.
• Earnings for future periods may be impacted by impairment charges for goodwill and intangible assets.
• The loss or unavailability of any of Acuren's executive officers or other key personnel could have a material adverse effect on its business.
• Acuren's business strategy of acquiring companies and making investments could be unsuccessful or consume significant resources.
• Acuren may experience inflationary pressures in its operating costs and cost overruns on projects and services.
• Natural disasters, industrial accidents, epidemics, war, acts of terrorism, and adverse weather conditions could disrupt Acuren's business.
• Acuren is and may become subject to periodic litigation, which may adversely affect its business and financial performance.
• Acuren's insurance coverage may not fully indemnify it against certain claims or losses.
• Demand for Acuren's business can be materially affected by governmental regulation, leading to reduced spending or increased costs.
• Hedging against interest rate exposure may adversely affect Acuren's earnings, limit gains, or result in losses.
• Growing use of artificial intelligence (AI) in Acuren's business has challenges that, if not properly managed, could harm its brand, reputation, business, or customers.
• Currency translation risk may have a material impact on Acuren's results of operations due to foreign operations (primarily Canada).
• Acuren's failure to comply with International Traffic and Arms Regulations (ITAR) could materially affect its financial condition and results of operations.
• Unsatisfactory safety performance may subject Acuren to penalties, affect customer relationships, and result in higher operating costs and employee turnover.
• Changes to laws and regulations that Acuren is subject to may result in additional costs and impact operations.
• If Acuren's intellectual property rights are unenforceable or become obsolete, or if new third-party IP becomes preferred, its competitive position could be adversely impacted.
• Acuren's business depends upon the maintenance of its proprietary technologies and information.
• Acuren's operations and properties are subject to extensive environmental, health, and safety regulations.
• Interruptions in the proper functioning of Acuren's information systems could disrupt operations and cause cost increases or revenue decreases.
• Acuren is subject to privacy and data security/protection laws, with potential for substantial costs and liabilities from non-compliance or cybersecurity incidents.
• Acuren's business is subject to risks arising from climate change, including legislation, consumer preferences, and physical impacts.
• The terms of Acuren's indebtedness may limit its ability to borrow additional funds or capitalize on business opportunities.
• Acuren's Credit Facility includes certain covenants and limitations on its operations, and failure to comply could lead to default.
• Acuren may incur substantial additional indebtedness, which could further exacerbate existing risks.
• Acuren may need additional capital in the future and may not be able to access it on favorable terms, or at all.
• Acuren's financial results are based, in part, upon estimates and assumptions that may differ from actual results.
• If Acuren fails to establish and maintain an effective system of internal controls, it may not be able to report its financial results accurately and timely.
• Acuren identified material weaknesses in its internal control over financial reporting, which, if not remediated, could adversely affect its business and stock price.
• As an emerging growth company, Acuren's reduced reporting requirements may make its securities less attractive to investors.
• Acuren may be required to issue additional shares of common stock pursuant to the terms of its Series A Preferred Stock, which could result in dilution to existing stockholders.
• Acuren's current directors may allocate their time to other businesses, leading to potential conflicts of interest.
• Acuren does not currently intend to pay dividends on its common stock, meaning returns depend on stock appreciation.
• Investors may not be able to realize returns on investment in Acuren's securities within a reasonable period due to illiquidity.
• Acuren may issue additional series of preferred stock, potentially reducing the value of existing securities.
• There is no guarantee that Acuren's Warrants will be in the money when exercisable, and they may expire worthless; terms may be amended without all holders' consent.
• Acuren's Warrants may be mandatorily redeemed prior to their exercise at a time disadvantageous to holders, making them worthless.
• There is no assurance that Acuren will be able to make returns for stockholders in a tax-efficient manner.

Future Outlook

The merger is expected to create a larger, more diversified company with enhanced cash flow generation and a strong pipeline for future acquisitions. Management anticipates significant cost synergies and commercial cross-sell opportunities, leading to the merger being accretive to Acuren's earnings per share in the first full year post-merger. The combined company aims for expeditious deleveraging to below 3x net leverage.

Management Comments

• "The Merger represents a compelling opportunity to the NV5 stockholders and highlights Acuren's and its Founders' track record of successfully combining with other companies." (Sir Martin Franklin, Acuren Co-Chairman)
• "The Potential Transaction would enhance the growth prospects for both companies and that the Revised Offer would provide a premium to the current share price of NV5 Common Stock, with a substantial cash component and an opportunity for NV5 stockholders to participate in the future upside of the combined company." (Sir Martin Franklin, Acuren Co-Chairman)
• "The transaction will provide the combined company with significant cash generation expected to lead to expeditious deleveraging to below 3x net leverage in line with long-term assets combined with a strong pipeline of future merger and acquisition opportunities benefitting from increased scale and access to capital." (NV5 Board's view)
• "The combined company would have a strong revenue growth trajectory, rapid deleveraging capability through superior cash flow conversion, and a healthy capital allocation balance." (NV5 senior management's conclusion)
• "The $23.00 per share offer reflected Acuren's best and final proposal to acquire NV5." (Sir Martin Franklin, Acuren Co-Chairman)

Industry Context

The merger aligns with key trends in the asset integrity industry, including digital transformation, the need to extend the useful life of aging infrastructure, increasing outsourcing due to technical resource constraints, and the growing use of advanced materials and stricter safety regulations. The combined entity aims to capitalize on the trend for customers to engage with larger service providers offering broader, tech-enabled services and scalable operations.

Comparison to Industry Standards

• The implied enterprise value to LTM Adjusted EBITDA multiple for NV5 in the merger is 11.6x, and for FY 2025E is 10.4x.
• Comparable publicly traded engineering and environmental consulting companies (AECOM, AtkinsRealis Group Inc., Bowman Consulting Group Ltd., Fluor Corporation, Jacobs Solutions Inc., Parsons Corporation, Stantec Inc., Tetra Tech, Inc., Willdan Group, Inc., WSP Global Inc.) had LTM Adjusted EBITDA multiples ranging from 8.2x to 16.9x (average 13.3x, median 14.0x) and 2025E Adjusted EBITDA multiples ranging from 7.3x to 15.6x (average 12.3x, median 13.1x). NV5's multiples are within or slightly below the average/median of these comparables.
• Selected acquisition transactions in the technical engineering and consulting sector showed EV/LTM EBITDA multiples ranging from 10.4x to 15.2x (mean 13.0x, median 13.0x). NV5's implied multiple of 11.6x is within this range.
• Acuren's implied enterprise value to LTM Adjusted EBITDA multiple from comparable publicly traded testing, inspection, and certification companies (Bureau Veritas SA, Intertek Group plc, Montrose Environmental Group, Inc., Mistras Group, Inc., SGS S.A., Team, Inc.) ranged from 5.3x to 14.3x (average 10.7x, median 11.2x).

Management Changes

Corporate Governance

Legal Proceedings

• Acuren is subject to various lawsuits, administrative proceedings, and claims arising in the normal course of business, with accruals for probable losses.
• Acuren is litigating to enforce non-compete provisions against former employees, noting that such agreements vary by jurisdiction and may be unenforceable (e.g., FTC's rule).
• Acuren is subject to periodic regulatory proceedings, including U.S. Fair Labor Standards Act (FLSA) and state wage and hour class action lawsuits.
• No material Actions are pending or threatened against NV5 Entities or their officers/directors (solely in their respective capacity as such) that would reasonably be expected to result in a NV5 Material Adverse Effect or materially impede the merger.
• No material Actions are pending or threatened against Acuren Entities or their officers/directors (solely in their respective capacity as such) that would reasonably be expected to result in an Acuren Material Adverse Effect or materially impede the merger.
• Litigation relating to the merger could result in an injunction preventing completion and/or substantial costs to Acuren and NV5.

Related Party Transactions

• Acuren's Founder Entity (Mariposa Acquisition IX, LLC), managed by Co-Chairman Sir Martin E. Franklin, purchased 1,000,000 shares of Acuren Preferred Stock for $10.5 million in May 2023 and additional Ordinary Shares in PIPE and Warrant Financings on July 30, 2024.
• Viking Global Investors LP, a significant stockholder, committed to purchase Ordinary Shares in PIPE Financing and exercise Warrants on July 30, 2024, and is a party to an Acuren Voting Support Agreement.
• P3-EQ, LLC (Progeny 3, Inc.) committed to purchase Ordinary Shares in PIPE Financing and exercise Warrants on July 30, 2024.
• Permian Investment Partners LP committed to purchase Ordinary Shares in Warrant and PIPE Financings on July 30, 2024.
• Mr. Cullinan (Acuren Director) purchased 2,500 Ordinary Shares in Warrant Financing on July 30, 2024.
• Mr. Pizzey (Acuren CEO and Director) purchased 400,000 Ordinary Shares in PIPE Financing on July 30, 2024.
• Acuren entered into a Consulting Services Agreement on July 30, 2024, with Mariposa Capital, LLC, an affiliate of Sir Martin E. Franklin, for an annual fee of $2.0 million for corporate development and consulting services.
• ASP Acuren had a prior agreement with American Securities, LLC for management consulting services, which terminated with the Acuren Acquisition.
• Certain NV5 directors and executive officers have interests in the merger, including severance benefits and accelerated equity awards, that are different from general NV5 stockholder interests.

Stakeholder Impact

• Shareholders (NV5): Will receive a mix of cash and Acuren stock, providing immediate liquidity and participation in the combined company's future upside, but face potential undervaluation concerns and dilution.
• Shareholders (Acuren): Will experience dilution due to new share issuance but gain ownership in a larger, more diversified company with enhanced growth prospects and synergies.
• Employees (NV5 & Acuren): May experience uncertainty about their roles and potential loss of key personnel due to integration. Continuing NV5 employees will receive overall compensation no less favorable in the aggregate for one year post-merger.
• Management (NV5 & Acuren): Key executives from both companies will hold leadership roles in the combined entity, with NV5 executives having interests in the merger beyond their stock ownership.
• Customers: Potential disruption to existing business relationships due to merger uncertainty. The combined company aims to offer a more comprehensive service portfolio.
• Suppliers/Vendors: Potential disruption to existing business relationships due to merger uncertainty.
• Creditors: Acuren's indebtedness will significantly increase, potentially impacting its credit profile.

Next Steps

• Acuren and NV5 to hold separate special meetings on July 31, 2025, for stockholder approvals.
• Acuren to issue shares of Acuren Common Stock to NV5 stockholders upon merger completion.
• NV5 Common Stock to cease trading on NASDAQ and be deregistered post-merger.
• Acuren to integrate NV5's business operations.
• The combined company will focus on expeditious deleveraging to below 3x net leverage.
• The combined company plans to continue pursuing future merger and acquisition opportunities.
• Acuren will nominate NV5 designees for re-election to the Acuren Board in the proxy statement for the first annual meeting after the Closing Date (expected to be the 2026 annual meeting).
• Acuren will continue efforts to remediate material weaknesses in internal control over financial reporting.

Key Dates

Recommendation

Keywords

Merger, Acquisition, SEC Filing, Proxy Statement, Acuren Corporation, NV5 Global Inc., Cash and Stock Transaction, Engineering Services, Testing Inspection Certification and Compliance, TICC, Nondestructive Testing, NDT, Rope Access Technician, RAT, Infrastructure, Asset Integrity, Corporate Governance, Risk Management, Financial Reporting, Debt Financing, Synergies, Stockholder Approval, Regulatory Approval, HSR Act, NYSE, NASDAQ