Shares in engineering consultancy Scott Wilson Group (LON:SWG) soared by 85% to 221.5p in early trading today following a recommended cash offer to buy the company at 210p per share from URS Corporation, the integrated engineering, construction and technical services group. The news came on the same day that Scott Wilson unveiled an expected 5% decline in full year revenues to £340.4m with pre-tax profits of £18.0m against £9.4m last year as cost efficiencies drive up operating margins to 7.0% from 6.3%.

The offer from URS represents a premium of around 141% to Scott Wilson’s share price at the close last Friday and approximately 123% to the average closing price per share over the twelve months to June.

Geoff French, Scott Wilson’s chairman, said: “The board is recommending the offer because it believes that it represents a compelling proposition for Scott Wilson's shareholders, customers and employees. As part of an enlarged and global group, our employees will be able to participate in larger and more complex projects as well as benefit from further investment in new areas of expertise and international markets where Scott Wilson has already established strong foundations. Our customers will benefit from having access to an enlarged global footprint and an ability to service their needs across a wider range of services and sectors. In an increasingly global marketplace, the board believes that a combination with URS will significantly enhance Scott Wilson's future prospects and we are excited about our future together.”

Turning to its results, Scott Wilson said its lower revenues reflected economic pressures in the UK, primarily in the property related market but that it had enjoyed solid growth from international markets, with revenue representing 37% of the total, against 31% last time. Elsewhere, the company eliminated its net debt from £18.3m in 2009 and reduced its pension deficit to £63.3m from £79.0m at the half-year.

Mr French added: “Despite the recent severe economic conditions in many of our markets, Scott Wilson has achieved record profit levels as well as erasing our net debt position. These achievements demonstrate the resilience of our business model and our ability to manage the business effectively in a challenging market. While the outlook in the UK remains uncertain, the range and depth of our technical expertise across our market sectors combined with our geographic spread provides us with…

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