Arcadis N.V. (ARCAD.AE) announced plans Thursday to acquire Malcolm Pirnie, a U.S.-based water services firm that expects to benefit from government stimulus spending.

The Dutch infrastructure specialist is paying around $222 million in cash and stock for privately held Malcolm Pirnie, whose largest business is providing engineering and consulting services to U.S. states and cities.

Arcadis chief executive Harrie Noy said the company had identified around $5 billion in potential industry revenue from water projects funded from the U.S. stimulus package.

Noy said the companies had been in discussions for some time, but noted on a conference call "that we will certainly benefit from the U.S. stimulus package."

The company downplayed the impact of potential stimulus-driven contracts, and said they did not influence the purchase price.

Most of the potential new stimulus business is from the top 20 metro areas in the U.S. where Malcolm Pirnie has strong relationships, said Noy. It's biggest client is New York City, while U.S. municipal and federal governments accounted for 83% of its $392 million in gross revenue last year.

Noy said Arcadis held exclusive talks with Malcolm Pirnie, which had also attracted other suitors.

The proposed acquisition - due to close in July if it secures shareholder backing - creates a new division for Arcadis and would lift it into the top 10 providers of engineering services for the water industry, a market led by U.S. firms such as CH2M Hill and Black & Veatch.

Arcadis is offering $135 million in cash and 5.74 million shares for Malcolm Pirnie. The stock closed up 2.6% at EUR11.03.

Noy said the proposed deal would be immediately accretive to earnings, with the purchase price equating to 5.5 to 6 times ebitda, toward the top end of its other recent acquisitions.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com