Good morning, ladies and gentlemen. Thank you for standing by. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. I would now like to turn the meeting over to Mr. Quentin Weber, Investor Relations. À vous la parole[Foreign language]. Please go ahead, Mr. Weber.
Thank you, and thanks to everyone for joining us today for a very special call and webcast presentation regarding the announcement we made earlier today related to WSP's acquisition of Golder. With us today are Alexandre L’Heureux, our President and CEO, and Alain Michaud, our CFO. This call is being recorded live, and it's being broadcast on our website. The accompanying slides that we will be referring to the call are also available for download on our website.
I would also like to invite you to view our video outlining our view for this acquisition of Golder. It's right on the visual platform that you can see. Before I hand over to Alex to discuss the announcements, I would like to point out that some statements made during this call will be forward-looking. Actual results or events describing the statements may differ materially from those expressed or implied.
We, at WSP, disclaim any intent to update or revise any of these forward-looking statements. Finally, the presentation is not intended to form the basis of any investment decision and does not claim to be comprehensive or to contain all the information that the recipients may need to evaluate the securities of WSP.
No representation or warranty expressed or implied is given, and so far as permitted by law, and no responsibility or liability is accepted by any person with respect to the accuracy or completeness of the presentation or any content or any oral or written communication in connection with the transaction of the securities of WSP. With that, I would like to turn the call over to Alexandre.
Good morning, everyone, and thank you for joining us today. I am extremely proud to share exciting news with all of you. Today, we have reached another significant milestone by entering into an agreement to acquire Golder, a global consulting firm with over 60 years of experience in providing earth sciences and environmental consulting services, benefiting from an outstanding reputation as evidenced by its consistent ranking among the leaders in ENR's top 500 design firms list.
Similar to the acquisition of WSP in 2012 and Parsons Brinckerhoff in 2014, Golder marks another very exciting step in our journey to become the reference in our industry. We firmly believe that the future belongs to those firms with meaningful visions because their purpose is to make the world a better place. At WSP, it is our purpose to be future-ready.
Today's significant announcement allows us to make real and tangible impact with the scale that gives science unlimited potential to address the issues we face globally. Furthermore, it is our vision to bring real harmony to our world. This transaction allows us to accelerate our ESG vision so that we can make an impact in our communities right now.
With its cutting-edge expertise, its attractive business mix, with strategic advisory services comprising approximately 70% of its revenues and 80% of its business from recurrent long-term relationships with blue-chip Fortune 500 and government clients, Golder significantly accelerates our growth in the highly strategic and in-demand environment sector and will unlock, in our view, significant opportunities.
To put things in perspective, our environment sector will represent approximately 25% or CAD 2 billion of WSP total CAD 8 billion pro forma net revenues, achieving a key milestone in our 2021 global strategic plan.
In addition, it immediately enhances our proportion of net revenues from strategic advisory services to approximately half of our total net revenues. As a result, our platform will now have three leading world-class franchises with transport and infrastructure totaling 47% of our net revenues and coming second, environment at 25%, followed by property and building at 21%. Without a doubt, Golder represents another significant milestone in establishing WSP as a leading force in our industry. Alain will now cover key financial terms of the transaction.
Thank you, Alex, and good morning, everyone. Let's now move to key financial highlights on slide five of the presentation. The transaction is based on an enterprise value of $1.5 billion, representing a multiple of approximately 10.4 times Golder's pre-synergy, trailing 12 months pre-IFRS adjusted EBITDA, and 8.4 times on a post-synergy basis.
From a margin standpoint, Golder's attractive margin profile will immediately increase our adjusted EBITDA margin before any synergies towards the higher end of our 2021 strategic ambition. We expect annual cost synergies of approximately $35 million to be achieved over a 24-month period, with 50% to be realized within the first 12 months from the closing date. Integration costs required to realize such annual cost synergies are estimated at $35 million in the aggregate.
The transaction will also be immediately accretive before any cost synergies to WSP's adjusted earnings per share, with accretion increasing to the mid-teens once synergies are fully realized. We intend to fund the acquisition with CAD 310 million of private placement of subscription receipts with new strategic investors and CAD 1.2 billion of underwritten term loans.
Pro forma net debt to LTM adjusted EBITDA at closing of the transaction is estimated to be 1.3x, remaining well within WSP's targeted leverage range of 1 to 2x. Moving to slide six, the transaction has been unanimously approved by the board of directors of both Golder and WSP and overwhelmingly supported by approximately 99% of Golder's partners, holding approximately 82.8% of the outstanding Golder shares.
The transaction, which is expected to be completed through a plan of arrangement, remains subject to certain customary closing conditions, including court approval and shareholder approval by not less than 75% of the votes cast at the shareholders, as well as customary regulatory approval. The special meeting of Golder shareholders is expected to be held on January 13, 2021. Closing is expected during the first half of the Q2 of 2021. On that, I will now turn it back to you, Alex.
Thank you, Alain. When we unveil our 2019 to 2021 strategic plan, as summarized on slide nine of the presentation, we set ambitious financial goals to deliver by the end of 2021. We targeted total net revenues between CAD 8 billion and 9 billion, an EBITDA margin profile between 15% and 16%, always with the goal of maintaining a very strong balance sheet with net debt to EBITDA ratio between one time and two times.
As we enter 2021, we are confident that our solid operating plan for the year, combined with the successful closing of the Golder transaction, along with our new long-term strategic investors, GIC and BCI, will position us well to achieve our 2021 strategic ambitions, and again, allow me to also reaffirm our pleasure. We are to welcome GIC and BCI as new strategic investors alongside the Caisse de dépôt et placement du Québec and CPPIB. The ongoing vote of confidence from our strategic investors is instrumental to our continued success in the execution of our strategy.
With this combination, we will now have a contingent of 54,000 passionate and talented employees, including 14,000 earth sciences and environmental consulting experts with unrivaled environmental, social, and governance expertise armed with the mission to meaningfully contribute to the world's green transition, and this transaction will significantly boost our presence and capabilities in key high-performing industries supported by highly complementary and diversified customer base, including, but not limited to, governments, technology, manufacturing, power, and resource sectors across key geographies, including the Americas, Australia, and Europe.
Turning to slide ten, WSP's attraction to Golder originates from a deep respect and appreciation of its legacy, reputation, and brand. Both firms share a like-minded vision of the sector, similar guiding principles and cultures, and our focus on strategic consulting, including our core belief that our technically driven client services mindset will continue to contribute to strategic growth and value creation for all of our stakeholders. Turning to slide 11 and 12, we believe the timing is absolutely right for this combination.
As in the past, taking informed risks and being opportunistic is, in our opinion, the right approach to create value for WSP shareholders. We believe WSP must lead by example, and we also believe that organizations are likely to be more resilient in the face of unexpected shocks and hardships if they are managed for the long term and in line with societal megatrends such as diversity and climate change.
We also believe the estimated $10 trillion in global COVID-19 stimulus will be pivotal for the world's low-carbon transition. This includes the incoming U.S. administration climate agenda to achieve economy-wide net zero emissions by 2050. Heightened public, corporate, and financial awareness for ESG matters is here to stay, and recent studies have shown a strong correlation between ESG and greater equity returns.
In the resource and energy sectors, WSP and Golder's combined expertise will also be a strong force in assisting clients around the world in the rehabilitation of their sites and the achievement of the green transition agenda. Moving to page 14 of the investor presentation, let me give you a few examples of why creating the leader in the sector is strategic to WSP. Megatrends are rapidly taking shape, and they are impacting our world and our industries. The political dialogue is changing with a renewed momentum.
For example, the human population in our cities is growing relentlessly, and by 2030, there will be six new 10 million-plus people in megacities, nearly 20% more than the 33 that currently exist. The addition of two billion people to the global population over the next 30 years will ramp up demand for vital human needs such as food, water, housing, and infrastructure, and will be set against increasing resource scarcity. The Earth's ability to meet this demand will be tested to its capacity.
This, combined with the use of the planet's precious resources and the biodiversity we have lost, exacerbates the need for expertise in the sector. It's also an appreciation that underlines the precarious position of much of our remaining natural capital. In parallel, there is a deepening climate crisis. The need to decarbonize and create a more sustainable environment has never been greater.
The next decade will be critical if we are to achieve our global goal of net zero emissions by 2050. In many ways, the rapidly growing ESG trends encapsulate all of the above and provide the narrative by which business communities must address the challenges ahead. Businesses need to demonstrate good corporate citizenship because stakeholder-focused firms that have adopted the principle of ESG perform better.
They are run more efficiently, more easily to attract top talent, have stronger balance sheets, and are more resilient. Increasingly, all that resource consumed, built, and utilized is being measured and recalibrated in ESG terms. The ability to play a real part in tackling these challenges is what makes the timing of this acquisition so important.
Against the backdrop of these macro trends, the global community needs environmental stewards with the breadth and the depth of expertise in the global scale and the drive to steer us to a greener, more sustainable future. In other words, the climate needs science-based solutions from scientists. Population growth needs engineered answers from engineers.
And that is exactly what WSP has to offer. Solving complex challenges and safeguarding communities with science-based and technical solutions is what Golder is known for, made possible by countless contributions from their experts around the world: scientists, consultants, engineers, each of them enjoying the distinction of being recognized as world-class Earth scientists and environmental experts. Together with WSP, this global reach will be amplified and expanded.
Building on a world-class ESG advisory firm by combining the talent pool of Golder and WSP enables us to take the leading role in the UN Decade of Action and beyond. Now turning to slide 15, 16, and 17, we have always been very clear about our ambitions to become the leading global environmental firm, and we are very proud of the prospect of reaching that ambition by combining Golder and WSP along with numerous recently completed strategic acquisitions.
Given Golder's position as the preeminent consultant in Earth sciences and environmental services, this acquisition secures our market leadership in core service areas that will be critical to the task ahead. Specialized services, including climate change, impact assessment, Earth sciences, and mining environmental solutions, will expand the service offering to our clients and give them access to the full range of advisory and technical skill set from the field, right up to the C-suite. As we stated in our 2019-2021 strategic plan, now is the time to be future-ready.
WSP has demonstrated that determination time and time again with our market pioneering commitments. WSP was the first professional services firm to sign a sustainability-linked syndicated credit facility in the Americas. In Europe, WSP co-founded the Pledge to Net Zero initiatives for the environmental industry, among others. And WSP is a signatory to the UN Global Compact. Environmental stewardship is in the DNA of both of our firms.
Our missions and values are well aligned, and now, as we enter the UN Decade of Action, we have the ambition to own this space. We want to formulate the message, and we want to enable our clients to meet their sustainability obligation by 2030 and beyond. What if we combine the best minds with the boldest opportunities? What if we redefine the new standard in a clean future? What if we let scientists create the solutions we need? The combination of Golder and WSP is a compelling answer to many of these aspirations. Thank you very much, and I would now like to open the line for questions.
As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Pour poser une question, veuillez appuyer sur Étoile suivie du 1 sur votre téléphone. Pour retirer votre question, appuyez sur le dièse[Foreign language]. Please stand by while we compile the Q&A roster. Your first question comes from the line of Mona Nazir of Laurentian Bank. The line is open.
Good morning and congratulations, and thank you for taking my questions.
Hello, Mona.
Hello. First, I was just wondering if you could discuss how the acquisition transpired and over what time frame. Were they on your list of potential targets, or were they perhaps looking to sell? There was some motivation on both sides.
That's a great question, Mona. I mean, the best deal that we completed in our history are the deals that we nurtured over time. We've developed and we have a long-lasting relationship with Golder, starting with our employees and our professionals. We've been working for Golder for as long as we remember, and the collaboration with the two firms has been in existence for a very, very long period of time.
These were bilateral discussions over a number of years. The discussion did not start three, four weeks ago or three months ago. We've had, and I have had the pleasure of interacting and having discussions with the CEO and the leadership team of Golder for many years.
But starting in the fall, we engaged in a number of more serious discussions, and we felt, for the reasons that I just explained in my address, that the timing was right for those two great firms to come together. And I'm extremely proud to see the support that we've received from the partners at Golder. So very exciting time and an amazing milestone for the company today.
Perfect. That's great information. Thank you for sharing. And just when I'm looking at the composition of Golder and the mix on a geographic basis, it's a very strong margin profile. But I'm just wondering if you could speak to where the synergies are expected to come from. Would it be fair to say, given APAC has a lower margin profile, perhaps this offer is a low-hanging fruit? So just looking for more detail and confirmation that all synergies are cost-related.
Yeah. Actually, the other way around. I mean, the way we're thinking about this transaction, Mona, is that this is not a cost synergy play. Of course, in any two firms coming together, there's always some synergies and cost synergies to generate. But where I see the biggest potential, and we have not included this in any of our forecasts or modeling, it's on the revenue synergy front. Golder, the composition that the client makes of Golder is essentially or approximately 80% private and 20% public.
And I see humongous opportunities on the public side to bring and to leverage Golder's expertise with our public sector clients. And conversely, I'm going to give you an example because you talked about Australia. Golder is obviously entrenched and has a strong relationship with the Department of Defence and is a big player with the Department of Defence of Australia.
Together, I think we're going to be able to increase and expand the scope of services that we can offer. But we're also going to be able to essentially hopefully take the number one position with this client. We do some work, WSP, with the Department of Defence, but Golder is doing a lot more. And we believe together, for instance, we're going to be able to create a great amount of revenue synergies with a client like the Department of Defence in Australia.
You talked about being a North American-centric firm. It's true that Golder has a strong presence in Canada and in the U.S. but do not forget that 17% of the top line is generated almost essentially in Australia. So Golder is indeed, on the earth sciences and environmental side, a very large player in Australia. So together, I believe it's just filling a huge gap that we had at WSP to really raise the bar on strategic advisory and environmental services in Australia. So all in all, I think it fills many, many gaps for us.
That's great. And just lastly, in your quest to be a leading firm in the environmental segment and related ESG presence, does this acquisition tick all of the boxes for you? I do understand that the target is continuously moving, and the goal today is quite different than perhaps two years ago. Thanks.
Yeah. No, it's definitely checking all of the boxes. You can always do more. You can always improve, but now we have, on the environmental side and consulting side, I think we have probably the most, if not the most diversified client base of any in our industry and outside our industry, and I include all other professional services firms in any industry, full stop. We have access to Fortune 500 clients. We have access to the public sector clients.
So I do feel that in the same way, Parsons Brinckerhoff was taking us and propelling us in all different places from a transportation point of view, and WSP, in 2012, on the property and building sector, Golder is essentially propelling us in a completely different stratosphere, essentially, from earth sciences and environmental point of view.
Great. Thank you so much for answering the questions, and very exciting time for WSP.
Thank you.
Your next question comes from Michael Tupholme of TD Securities. The line is open.
Thanks. So first off, congratulations, Alex, and everyone else.
Thank you, Michael.
So first question, Alex, just relates to the integration process. Wondering if you can talk a little bit about how you see that process unfolding, including any different approaches or special steps that you think you may need to take given the ongoing challenges created by COVID-19.
Yeah. Well, the first point is, in recent months and years, I've been talking about the various criteria that we follow when we complete a transaction. And if you recall, I gave four different criteria. And I said, first of all, is there a strategic imperative to do this deal? And in this case, I think without a doubt, there was for us a strategic imperative to complete a transaction with a firm like Golder that's the plan that we had unveiled at the Investor Day beginning of 2019.
The second one is, can we agree on price? And is the transaction accretive day one for WSP and our shareholders? And definitely, we are extremely pleased with the transaction terms and the way we've worked the transaction with Golder's partners and the management team. The third one is the culture, right?
And I mentioned it in my address earlier on. We share a like-minded vision. We understand what we wish to accomplish and the role that we want to play as a firm in our industry, but outside and also in our local community. So that is a natural, and we're fitting that box too. And the last one is, can you integrate it?
And when you have 99% of the partners voting in favor of this transaction, and this is a firm that had been independent for 60 years, but they're seeing the vision, they're seeing the mission, and they understand that together we'll be stronger, that's a very good start when we wish to integrate a company.
Obviously, I will be taking the time once we close the transaction to explain our vision, to explain our mission, to explain the direction that we want to take together as the leading firm, the leading global environmental firm and the reference in our industry, but also to make sure that we continue to be inclusive. I said earlier on to Mona that there's very little duplication in the client base.
That's also always an amazing start. When there are no duplication with our client-facing people, that makes the integration that much easier. So I do not expect a difficult time. I believe that the leaders of Golder will be an active role in the development of the company. I think we'll assess it once the closing is done.
But what the period between announcement and closing will allow us to do is to get ready to action as soon as the transaction is closed. So, very exciting time. And given that we have strong operational hubs in the market where Golder is a strong player, I think that will make it that easier to integrate.
Okay. No, I appreciate that. Thank you. Second question, can you talk about Golder's historical growth trends, where that growth has come from? And then also, if possible, address how the business has performed over the course of calendar 2020 in view of the global economic challenges?
Yeah. The company was quite resilient, actually, in 2020. It did very well, maintained its margin profile. The backlog was fairly strong and strong. And over the last four or five years, this is a company that has grown year over year organically. And in many instances, with global clients, a double-digit organic growth rate. On the aggregate, it was not always double-digit, of course. But this is a company that year over year for the last five years has been growing. And obviously, this was a positive sign for us at WSP.
Okay. I mean, just looking at the business going forward, if we think about standalone Golder before considering cross-selling opportunities, which it certainly sounds like there are some there as well, but on a standalone basis, is that the sort of growth, that type of growth that you just mentioned that they've seen historically that we could expect going forward, given the positives in the environmental sector?
Certainly, the underlying trends are there, right? So that's, again, a good starting point. We just announced this morning, so you're going to give us a bit of time to get back to you and start giving you some forecasted numbers. And we're going to need to spend some quality time together before we can provide you with more certainty around the future.
But look, on a standalone basis, clearly, Golder was operating in an upward trajectory industry and world. And they were really in the right market. And we believe WSP and also our environmental sector for the past few years was the market that was growing the fastest. And certainly, in 2020, it was the case again. So I don't have anything ready to make a prediction just yet. Certainly, I think we feel that we're buying a company that is operating in the right market right now.
Okay. Thanks for that. And congratulations again. And I'll turn it over.
Thank you.
Your next question comes from Benoit Poirier of Desjardins Bank. Your line is open.
Yeah. Good morning, Alex. Good morning, Alain. Congratulations again for the very nice transaction.
Thank you, Benoit.
Yes. Could you maybe talk a little bit about the seasonality of Golder, whether it's similar to WSP when we look at the first half, second half, or Q1, Q4?
It's a very simple answer. Benoit, very, very similar.
Okay. Okay. That's great. And with respect to your backlog, could you comment about the backlog that will be brought to WSP and whether the visibility is similar in terms of number of months in comparison to WSP?
Yeah. This is a conversion of month. I mean, it's also similar. It's around 12 months, if my memory is not failing me. And if it's any different than what I just said, Alain could take it offline with you. But it's around 12 months. And it's a very strong backlog. It's a good backlog. Of course, I don't know what 2021, 2022, 2023 will look like as we know today. But the reason why we think that the timing is right, there's a new U.S. administration with the balance of power over there.
There's renewed momentum around climate change. And again, I think the mindset of the corporate world is also changing very rapidly. And actually, I would say it's changed dramatically already since we unveiled a strategy at the end of 2018, beginning of 2019. It's just accelerating. We believe that the current environment is quite pertinent to our desire to do a deal with Golder.
Okay. So that's it. And thank you very much. And congratulations again.
Thank you.
Your next question comes from Devin Dodge of BMO Capital Markets. The line is open.
All right. Thank you. Good morning, guys.
Good morning.
I know you classified Golder's revenues as roughly evenly split between environmental advisory, earth sciences. But when we look at the revenue breakdown in ENR, it lists industrial and petroleum and hazardous waste as two of Golder's largest verticals. Can you help us better understand their end market focus?
Yeah. Well, ENR is a great publication in that space. So is Environment Analyst and a few others in the space. And on page 14 of our presentation, we've used some of that data to try to provide you the lay of the land when you exclude water, which, in my opinion, you should be excluding when you look at the total revenue that we will be generating as a combined firm in the leadership position that we've acquired with this transaction.
To answer your question more specifically around advisory, Golder is providing advisory services across all segments. And more specifically to your question around mining and resources, on a combined basis, still today, oil and gas and the mining sector represent less than 5% of our combined revenue on a pro forma basis or about.
We believe that if you want to be an actor and a leading actor in their rehabilitation and the green transition agenda, and if you want to be a leading player on the ESG front, you can't ignore the resource and energy sector. You need to be able to be there for those clients and assist them and their green transition agenda. I just believe that this is a great opportunity for us to assist those clients in the years to come. There will be a ton of opportunity to assist them and the rehabilitation of operating sites from an advisory point of view. I think this is positive.
Okay. That makes sense. So after the deal, you mentioned your leverage was going to be around 1.3 times. It's still below the midpoint of the targeted range. I think even if you had entirely self-funded the deal, leverage would have been only slightly above that midpoint. Should we interpret this to mean that you could still be active in your M&A efforts? And if so, I guess what sectors or regions do you expect to be focusing on going forward?
Yeah. I think today we should celebrate the combination of Golder and WSP together, but at the same time, and by the same token, my answer to your question would be that it's part of our DNA. Since our IPO, that's what we've done. That's what we're known for. We always develop thoughtfully our strategy and our strategic cycle, and we stick to it, and this time around is not any different. This is a significant milestone for us .
We wanted to take a big step and take a leadership role in the environmental consulting space, and I think we're achieving that with this transaction. Now we are welcoming two very sophisticated, high-quality strategic investors joining our ranks. This was, by the way, done in collaboration with the CDPQ and CPPIB, and we purposely choose to do it this way because we want to maintain our firepower.
If any, we want to increase our firepower for years to come. To be in a position to have CPPIB and GIC joining our ranks, I mean, makes us very happy. We have a very strong balance sheet. We are in the process of developing our operating plan for 2021 and more to report in due course around our plan for the years to come.
Okay. That's it for me. Congrats on the acquisition. I think it looks like a pretty interesting deal.
Thank you very much.
Your next question comes from Sabahat Khan of RBC Capital Markets. The line is open.
All right. Thanks, Sandy. Good morning. Maybe to be sure, just a little bit of color on the private versus public mix indicator. It's about 80% private. Is that just the nature of the work that Golder was undertaking? Maybe what led to a bit more private mix historically for those guys?
No. I think that 80/20 is just the problem. I mean, they work, as I said before. I mean, Golder's client list is very impressive. They work with, I wouldn't venture in saying they work with every single Fortune 500 client, but they do work with a significant portion of them. And that's historically their DNA and what they've been doing. Over time, they did increase over time their exposure to the public sector. And they do work with governments.
And I talked about the Department of Defence in Australia. That would be a good example. They work in Canada with the various departments of transportation. But I think this is a real opportunity for us to leverage the work that we do and how we do it in the various parts of the world and bring their expertise alongside us.
Okay. Thanks. And then you showed a little bit of color earlier on the revenue synergies and opportunity there. I guess when you think about the revenue synergies, is it looking at Golder's geographic mix maybe more in the Americas? I guess is there a region that you're more focused on? Is it just, I guess, public sector clients across your major markets? How should we think specifically about what's top of mind or focus for you to expand their revenue?
Look, our strategy has always been and will always be we want to be the leading firm and the reference in OECD countries. And that's not going to change. That doesn't mean that we're not working in countries outside of the OECD space. But I think as a general statement, we want to be the reference in those countries. So clearly, we're going to continue to make a large push in Australia.
We're going to continue to focus on the U.S. Today, we've acquired a solid, very solid position in Canada with our expertise and what Golder is bringing to the table. In Europe, and I haven't talked about Europe, but the combination of Golder and the Nordics is only increasing an already strong position in the Nordic countries. So, I think that that's the reason why we believe Golder was so compelling is they are a strong force in the countries where we operate.
All right. Great. Thanks very much for that.
Thank you.
The next question comes from Chris Murray of ATB Capital Markets. The line is open.
Yeah. Thanks, folks. Good morning and congratulations. Just a couple of quick questions about the transaction close. I guess first of all, you mentioned the fact that you've got, I guess, it's lock-up agreements with 99% of the Golder senior employees. That represents, I guess, at least according to the press release that you guys put out, about 83%. The other remaining shareholders, is that in a block or is that well diversified? And have you been able to talk to those shareholders at all?
It is well diversified. But pre-announcement, we were not in a position. Actually, the strategy was not to reach out to all of the shareholders. We wanted to reach out to the partners. And the partners, 813, if my memory is not failing me, own essentially 83% of the company. And it was important for us to get a sense as to whether they would be in favor of such transaction.
And that's the reason why we brought them in under the tent in a very creative way without getting into too much detail to really get a sense of whether they would buy into a transaction and a combination of WSP and Golder. And I mean, the results are there. And this speaks for themselves. I mean, they were all in favor of joining WSP and create something special between the two firms.
Okay. No, that's great. And then you did mention that you may need some regulatory approvals. Is there anything unusual or any particular jurisdictions where this will require some sort of formal review like an HSR or an antitrust approval?
Yeah. A typical antitrust approval process that we're going to have to go through. I mean, obviously, it's something that it's a hurdle that we're going to have to cross, but we crossed it many times in the past with PB, with WSP, with Focus , with Opus, so it's something that we're going to have to go through. Yeah.
Okay. And then I guess my last question, just thinking about the two new strategic investors, can you maybe give us some more indication or some color on how they came to be part of this transaction?
Look, like everything WSP does, and I do personally, is we built relationship. Our relationship with GIC has not started three months ago. We've been in discussion with GIC for years. So the same thing with BCI. Over time, we had the opportunity to develop a relationship with those two strategic investors. Obviously, when we saw that a transaction between Golder and WSP could be possible, we entertained discussions also in collaboration with CPPIB and the CDPQ about the prospect of bringing them in.
Again, always with the long-term future of the company in mind. We believe that we have long-term plans for the company. We don't want to stop here. I think we have a long way to go to transform and to continue to propel the company in the mission, the vision that we have. We believe that welcoming two new partners was probably the right time to do this.
Okay. Fair enough and then just a mechanical question. Have they given you any indication whether or not they'll be taking their dividends as part of the DRIP program or taking it in cash?
No. They will DRIP it. They will be DRIPing.
All right. Thank you very much.
Thank you.
Your next question comes from Dimitry Khmelnitsky of Veritas. The line is open.
Hi, and thanks a lot for taking my questions.
Hello. Good morning.
Good morning, gentlemen. So the first question, just to confirm, you mentioned that revenues and EBITDA from Golder are on TTM basis. This is TTM ending Q3 fiscal 2020?
Yes. Yes.
Got it. Okay. Beautiful. Can you please indicate the impact of IFRS 16 on Golder's EBITDA?
Yeah. Look, I mean, the assumptions and the hypothesis you should be taking around IFRS 16, if you look at the breakdown for WSP in the pre and post-IFRS 16, I'd say it would be a fair assumption to use something similar at this point in time for Golder. And I don't believe. That's not far off. Yeah.
Got it. Thank you. This question has been asked, but I wonder if you can maybe expand on that a little bit. That is the impact of COVID on Golder's revenue and EBITDA year to date. I guess particularly maybe Q2 and Q3, if you may.
Yeah. Well, Golder performed very well this year in the context of a COVID environment. Obviously, this was worldwide. This impacted everybody in every country. But we came away quite impressed with the way they were able to maintain their margin profile and continue to win work and to perform as a company over the course of the first three quarters.
Okay, and can you indicate the percent of Golder's revenue that I derived from mining and oil and gas? You indicated a rough proportion on a consolidated pro forma basis, but just specifically to Golder.
Yeah. It's around 15%, which would be related to the resource sector. And above 20% for around the mining sector. So on a pro forma basis, it would be below 5%. And again, what you need, and this is a very good question, and I'm pleased that somebody asked that question, we're not necessarily talking about engineering work here.
We're talking about advisory work, assisting those clients in the OpEx and the cost associated with the running of their operation. So I think that being in a position to assist this list of clients, I think, is a tremendous opportunity for years to come for Golder and for the company on a combined basis.
Right. Yep, and so that touches on the next question that I wanted to ask. And that is, based on your expectation, is that revenue from mining and oil and gas, is it indirectly affected by changes in commodity prices or it's agnostic to changing environment?
I would answer this by using a different word. It's quite resilient. Given the high expertise and the deep skill set that this company has and access to the top quality clients around the world, Golder has always been in a position, and I mention it, I believe, in my address, but the margin profile and the operating margin of Golder are higher at this point than WSP. So they have been, given the sheer expertise that they're able to provide to clients, they have been able to maintain, if not improve their margin profile throughout time. So this is quite impressive.
Right. Okay. Perfect. And then you mentioned the Biden Green New Deal potentially contributing to future growth in environmental spending and cutting the carbon footprint. So Biden doesn't have the control of the Senate. And so there is Republican control. And it's unclear whether Republicans would at all cooperate on the Green New Deal.
So I'm just wondering, if the Green New Deal doesn't go ahead, does that, and also, by the way, keeping in mind the fact that OECD governments are running very significant deficits as a result of COVID assistance and support programs, would that affect, in your opinion, revenue growth trajectory of Golder if the Green New Deal doesn't go through given the government deficits?
My answer to that is there were no Green New Deal the last four years in the U.S. It certainly did not preclude Golder to grow as a firm. The reality is the world is changing. There's this momentum. I think I mentioned it earlier on. When we unveiled our strategy in 2008, 2009, we saw something. That something is even bigger two, three years later.
The fundamental trend and the underlying trend and the mega trends are there, and they're not going to change. We are entering a market with tremendous opportunities for growth in years and years to come. As I said before, you asked about mining and oil and gas. There is a tremendous opportunity for an advisor like WSP Golder to assist this industry and their green transition agenda. Somebody is going to have to assist them, and I think we are in a unique position to play a leading role in that.
Yes. Absolutely, and the last question, if I may, is why didn't CDPQ and CPPIB not participate in this round of private placement? They participated in the last round, and they obviously already own meaningful positions in the company, but I wonder why didn't they participate this time around?
First and foremost, you will recall that we did complete a fundraise earlier this year, and they did participate with no deal being announced. This is a real testament of the support of our vision and company. The discussions that we've had with GIC and BCI were encouraged by CDPQ and CPPIB. This was done in collaboration with our two long-term strategic investors.
It's a strategy to strengthen our balance sheet and a strategy to strengthen our investor base. I'd like to thank personally and on behalf of the team and our board the support that we have from the CDPQ and CPPIB in that regard and how they've been an incredible support and also help throughout all of those times and all those years. So I wouldn't read anything into this other than it was a strategic move to expand our strategic investor base.
Thanks a lot. Have a happy holiday season.
Thank you. You too. Bye-bye, Dimitry.
Your next question comes from Frederic Bastien of Raymond James. The line is open.
Hello.
Hello.
Bonjour[Foreign language]. Guys, kudos to you, Alex, Alain, and the rest of the team for nurturing what seemed to be a very long relationship and getting this deal past the goalposts. It looks like you did it again, and I think you managed to exceed your strategic ambitions, but more importantly for me, you're achieving that without really creating any significant discipline overlap across the organization.
I think for me, that's the key takeaway. Anyway, onto questions. A lot of them have been already asked, but you provided some good background information on the relationship with both GIC and BCI. But I just want to make sure I heard you right, Alex. Have these institutions expressed a desire to continue supporting and potentially increase their ownership in WSP down the road?
Yes. The answer is yes, and by the way, it's true for the Caisse and CPPIB.
All right. Well, we're going to buckle our seatbelts. Thank you.
Your next question comes from Michael Tupholme of TD Securities. The line is open.
Thank you for taking the follow-up. Alex, I know earlier you mentioned that this transaction is not about cost synergies, but you did indicate that you do expect about CAD 35 million of cost synergies. I'm just wondering if you can provide a little bit of detail into where you expect those cost synergies to come from?
Yeah. Well, the message is for you, but it's also for Golder's employees and our own employees. This is a revenue synergy transaction. There are very little, if not any overlap on the client base, on the expertise. And I want our employees and Golder's employees to hear that this is the coming together of firms that will complement the expertise and expand the level of services that we can offer in every segment of the business in which we evolve and operate.
But like any deal, Michael, there's always some back-office synergies around systems, insurance, around professional fees, around streamlining the operation. But it's not about the client-facing activities. To the contrary, we're coming together because we believe we can do more together. And that's the storyline on this deal.
All right. I appreciate that. Thank you.
Thank you.
There are no further questions at this time. I'll turn the call back over to the presenters.
So thank you very much for attending this call on such a short notice. WSP is tremendously excited about this transaction. And we look forward to updating as we progress in the year and in the following quarters. So thank you very much and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.