SNC-Lavalin to buy British engineering and consultancy firm WS Atkins for C$3.6 bn
21 April 2017
Canadian engineering and construction giant SNC-Lavalin Group Inc yesterday struck a deal to buy British engineering and consultancy firm WS Atkins Plc for C$3.6 billion ($2.67 billion).
The firm bid comes a few weeks after SNC-Lavalin had made an indicative offer.
SNC-Lavalin has not changed its indicative offer of 2080 pence ($26.66) per share in cash, which is a 35.1-per cent premium to Atkin's closing price on 31 March.
Canadian pension fund Caisse de depot et placement du Quebec (CDPQ), SNC's biggest shareholder, will extend a loan of C$1.5 billion ($1.11 billion) to SNC and buy C$400 million ($297.00 million) of equity in the company to help finance the acquisition.
The loan will be secured by the value and cash flows of SNC-Lavalin's interest in the Highway 407 ETR project in Ontario, CDPQ said separately.
SNC-Lavalin expects to generate synergies of around $120 million by the end of the first full financial year.
The merger will create a $12.1-billion global professional services and project management company with 53,000 employees.
''We are very pleased to announce this proposed acquisition that is fully aligned with our growth strategy, creating a global fully integrated professional services and project management company – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance,'' said Neil Bruce, president and CEO of SNC-Lavalin.
''It also creates new revenue growth opportunities in key geographies by positioning us to capitalize on increased cross-selling and the opportunity to win and deliver major projects in new regions,'' he added.
Founded by Sir William Atkins in 1938, Atkins is a multinational engineering, design, planning, architectural design, project management and consulting services company.
The Epsom, England-based company is UK's largest engineering consultancy and the world's eleventh-largest global design firm.
The London stock exchange-listed company employs round 8,000 people in 300 offices across 29 countries and has undertaken projects in over 150 countries.
A successful deal would strengthen SNC-Lavalin's foothold in Europe, which accounted for only 5.3 per cent of its sales last year, while Atkins generates almost half its £1.862 billion annual revenue there, according to Bloomberg.
Founded in 1911 by Swiss-born Arthur Surveyer in Montréal and merged in 1991 with its biggest competitor, Lavalin, to become SNC-Lavalin, the Montreal-based company is one of the world's leading engineering and construction groups providing EPC and EPCM services in a variety of industry sectors, including mining and metallurgy, oil and gas, environment and water, infrastructure and clean power.
SNC-Lavalin operates in oil and gas, mining and metallurgy, environment and water, nuclear power, hydro power, the transmission and distribution of energy, thermal power, and a variety of infrastructures, including mass transit and heavy rail systems, highways, bridges airports and marine facilities, as well as industrial, commercial, cultural and healthcare buildings.