SNC-Lavalin to buy British engineering firm WS Atkins PLC for $3.6 billion
April 20, 2017 - 3:30 PM
MONTREAL - SNC-Lavalin is making the largest transaction in its history after reaching an agreement to purchase British engineering and project management consultancy WS Atkins PLC for $3.6 billion.
The Montreal-based company (TSX:SNC) announced the transaction Thursday, about two weeks after it confirmed making a tentative offer.
The deal, expected to close in the third quarter and to be approved by the boards of both companies, will enhance SNC-Lavalin's size by boosting annual revenues to $12.1 billion and increasing employee numbers to 53,000.
"This acquisition is fully aligned with our stated growth strategy of becoming a recognized global E&C powerhouse," SNC-Lavalin CEO Neil Bruce said in a conference call after markets closed.
He said the addition of the complementary business expands SNC-Lavalin's geographic reach and diversifies its global customer base.
Founded in 1938, WS Atkins has 18,000 employees and about two billion pounds of annual revenues from activities mainly in the U.K. and Scandinavia, along with the U.S., Middle East and Asia.
About 86 per cent of its revenues are in infrastructure and 14 per cent in energy.
Bruce said the addition of WS Atkins will increase margins and improve SNC-Lavalin's position in infrastructure, rail and transit, and nuclear by capitalizing on large-scale infrastructure projects in North America and nuclear maintenance and decommissioning projects.
It will acquire WS Atkins stock for 20.80 pounds per share in cash, subject to approval by shareholders, regulatory and court approval.
SNC-Lavalin's largest shareholder, The Caisse de depot, will provide $400 million through the private purchase of equity and a $1.5-billion non-recourse loan secured by its interest in Highway 407 near Toronto. The rest is financed by debt and the issuance of equity.
About $120 million in cost savings are expected one year after the acquisition.
"This transaction has the potential to transform SNC-Lavalin into one of the leading engineering consulting firms in the world," said la Caisse CEO Michael Sabia in a statement.
"The acquisition will strengthen the company's position in high-growth market segments and industries, in addition to enhancing its presence in the European market."
Note to readers: This is a corrected story. A previous version stated WS Atkins had annual revenues of two million pounds
News from © The Canadian Press, 2017