23 April, 2017
MONTREAL-SNC-Lavalin Group Inc. announced April 20 that it has reached an agreement to acquire United Kingdom -based professional services firm WS Atkins plc for $3.6 billion.
"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.
At 0800 GMT, shares in Atkins were up 95.27 pence, or 4.8%, at 2077.27 pence.
The offer price of 2080p is a 35% premium on last Atkin's closing share price.
SNC-Lavalin says the acquisition will create a $9-billion professional services and project management giant with 53,000 employees that will "significantly improve" its margins and "further balance its business portfolio" in infrastructure, rail and nuclear sectors. The company expects the acquisition to close third-quarter 2017.
The UK company will not pay any final dividend for the financial year ended 31 March 2017.More news: Here's how the H-1B visa program works
Atkins now employs 18,000 staff and generated revenues of around £2bn in 2016.
SNC-Lavalin's Bruce said: "By combining two highly complementary businesses, we will increase our depth and breadth of services to position us as a premier partner to public and private sector clients". I look forward to welcoming Atkins' employees into our combined company.
When the deal is completed, Uwe Krueger will step down as Atkins CEO and director, although he and SNC-Lavalin are set to "discuss putting in place a transitional services agreement", says the intended new parent.
On top of any cross-selling benefits and increased geographical reach, SNC-Lavalin anticipates delivering annual cost synergies of around CAD120.0 million by the end of 2018 - split CAD90.0 million from WS Atkins and CAD30.0 million from SNC-Lavalin. "Together, we will become part of a larger global organization that will open the door to new opportunities for further growth and development".
"This transaction has the potential to transform SNC-Lavalin into one of the leading engineering consulting firms in the world", said Michael Sabia, president and chief executive officer of the Caisse, in a news release.