CANADA’S SNC-Lavalin Group will take over Ireland’s Kentz Corporation in a friendly cash acquisition, a move it says will help it become a global tier one engineering and construction services company.
Kentz shareholders will receive £9.35 in cash for each Kentz share held under the deal, valuing the company at about £1.2 billion (C$2.1 billion) in total.
The offer has received the unanimous recommendation of the Kentz board, with directors voting their shares – a total of 14.4 per cent of the company’s total issued capital – to the transaction.
SNC-Lavalin Group president Robert G Card said the addition of Kentz to the company’s asset portfolio would significantly strengthen its capabilities in oil and gas, with a combined team of about 18,500 working in the sector
“We are excited by the prospect of merging the excellent capabilities of our two oil & gas teams under the leadership of Christian Brown, Kentz’s CEO, which will create a world-class team inside of SNC-Lavalin to better serve our combined clients worldwide,” he said.
“This proposed acquisition and the agreement to sell (Canada-focused transmission group) AltaLink are important milestones in our stated strategy for growth. Together, they give us confidence to increase our focus on the disposition of other mature assets. ” he added.
Mr Brown, who will report to SNC Lavalin president of resources, environment and water Neil Bruce once the acquisition is completed, said the offer recognised the value of Kentz’s future prospects and its client base.
“We have a bright future and I believe that SNC-Lavalin’s technical abilities and scale can support our continued success and bring further benefits to our employees, clients, and partners,” he said.
Mr Bruce said the acquisition complemented the company’s existing client offering and broadened its geographic reach in high growth regions.
“By increasing our mid- and upstream greenfield capabilities in oil & gas, as well as enhancing our ability to efficiently complete, commission and provide asset support for projects, we will jointly be better able to help clients maintain and enhance their facilities affordably, safely and efficiently.”
The acquisition will be financed by an asset sale bridge loan of C$2.55 billion, and a term loan of C$200 million.