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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  WS Atkins PLC    ATK   GB0000608009

WS ATKINS PLC (ATK)
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WS Atkins : Canada's SNC-Lavalin to buy WS Atkins in C$3.6 billion deal

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04/21/2017 | 12:21am CEST
A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal

(Reuters) - Canadian engineering and construction company SNC-Lavalin Group Inc (>> Snc-Lavalin Group Inc) on Thursday said it would buy British engineering and consultancy firm WS Atkins Plc (>> WS Atkins PLC) for C$3.6 billion (2.08 billion pounds), firming up an indicative offer it made earlier this month.

(Reuters) - Canadian engineering and construction company SNC-Lavalin Group Inc (>> Snc-Lavalin Group Inc) on Thursday said it would buy British engineering and consultancy firm WS Atkins Plc (>> WS Atkins PLC) for C$3.6 billion (2.08 billion pounds), firming up an indicative offer it made earlier this month.

SNC-Lavalin's offer of 2080 pence ($26.66) per share in cash is the same as the indicative offer Atkins disclosed on April 3. It represents a 35.1 percent premium to Atkin's closing price on March 31.

“This acquisition is fully aligned with our stated growth strategy of becoming a recognised E&C (engineering and construction) powerhouse,” Neil Bruce, chief executive of Montreal-based SNC, said on a conference call.

The combination creates a global company specializing in professional services and project management with C$12.1 billion in revenues and 53,000 employees.

Bruce said the deal would boost SNC’s position in its nuclear, rail and transportation and infrastructure core businesses, while reducing its exposure to oil and gas.

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 said its funding will also include an C$800 million ($594.00 million) public bought-deal offering.

The deal is expected to generate about C$120 million in cost savings, including C$90 million ($66.83 million) from Atkins and C$30 million ($22.28 million) from SNC, through efforts such as eliminating corporate costs and consolidating offices, Bruce said.

RBC was SNC's financial adviser, while Norton Rose Fulbright provided legal counsel.

The transaction is expected to close in the third quarter of 2017, SNC said.

($1 = 0.7802 pounds)

($1 = 1.3468 Canadian dollars)

(Reporting by Allison Lampert; Additional reporting by John Benny in Bengaluru; Editing by Leslie Adler)

By Allison Lampert

Stocks treated in this article : Snc-Lavalin Group Inc, WS Atkins PLC
Stocks mentioned in the article
ChangeLast1st jan.
SNC-LAVALIN GROUP INC -0.29% 55.1 Delayed Quote.-3.17%
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