Dan Batrack: We can €“ one thing that’s interesting is the work that RPS has been doing to support the offshore wind is different than what we’ve been doing. Now, they’re both under the buoy’s or under the general topic of permitting or offshore studies. But RPS brings new technologies that we’ve just not seen or utilized here in the United States. So an example would be they have offshore automated autonomous buoys. And these are very large buoys. They’re almost like small vessels and they have LiDAR systems on them. They have Radar systems. They have self regenerating power supplies through solar panels. They measure all of the different attributes necessary for modeling in case of a discharge of oils or some aspect of environmental impact from the offshore wind or the vessels that are actually servicing them.
So if you have a vessel out there and there’s an oil spill, you can do real-time monitoring for oil spill, trajectories state, transport all the rest of it real-time on-site with these buoys. And we haven’t used those here in the United States. On the other hand, the work that we have here in the US with the offshore very high resolution green biology divers impacts to Benthic studies, which are underground critters in the water. Fisheries, avian flyways, the very high radar systems that we have to monitor all types of avian species, birds others we have here in the US. We have a small fleet of offshore high-resolution surveys bathymetric surveys, hydro survey, sub-bottom profiling and real-time evaluation of marine mammals, we can bring to them.
So they’ll bring to us technologies we’ve never seen in the US and we’ll bring to them technologies that haven’t yet been used in Europe or other locations. So I think it really is very complementary and synergistic. So €“ that’s why again, I love the financial model that will come out with mid to high-teens accretion no doubt that’s fantastic. But on the revenue side, what we can bring to the industry is just really exciting to us.
Tate Sullivan: And then I mean one thing on RPS, I was €“ and maybe it depends on transitioning it to the GAAP accounting the higher subcontracting costs to get from revenue to net revenue. And then to bring up RPS’ margins does that imply some divestitures perhaps €“ do they do some lower-margin construction management work €“ or is that €“?
Dan Batrack: Yeah. There €“ well, the gross to net is actually smaller than Tetra Tech. So they actually have less of a difference from gross to net. So on a full annualized basis, a 12-month basis, there are about $700 million on gross revenue or total revenue, and we expect on an annualized or 12-month basis to be around $600 million on net revenue. So that about 15% difference between gross and net is actually less than that at Tetra Tech. Tetra Tech, here we do more government work than they do and we have more requirements for using small disadvantaged participation on execution of federal work. And so we naturally have contractual obligations to meet the subcontracting requirements. As far as, do they have some work that is lower margin, yes.
We’re not necessarily see divestiture. But as we had implemented in both Coffey and WYG, we are going to change the model and move it decidively to one direction which is more high-end, which is reflected with less competition, higher margin and technically differentiated services that are just not offered in the marketplace or have a much different competitive landscape in the marketplace. So the efforts will be not to be bigger, but our absolute focus is to be better with RPS. And where that can be reflected. That is going to be reflected in margin.
Tate Sullivan: Thank you, Dan.
Dan Batrack: Thanks, Tate.
Operator: Thank you. Our next questions come from the line of Michael Dudas with Vertical Research. Please proceed with your question.
Michael Dudas: Thank you. Good morning, Dan and Jill.
Dan Batrack: Hi, Michael.
Jill Hudkins: Hi, Michael.
