Menu

SNC-Lavalin completes transformative Acquisition of WS Atkins

SNC-Lavalin Group Inc. (TSX: SNC) (“SNC-Lavalin” or the “Corporation”) announces that it has completed its acquisition of WS Atkins plc (“Atkins”), one of the world’s most respected consultancies in design, engineering and project management, with a leadership position across the infrastructure, transportation and energy sectors. Headquartered in the UK, Atkins is a geographically diversified global company with approximately 18,000 employees in the US, Middle East and Asia, together with a leading position in the UK and Scandinavia.


“SNC-Lavalin is continuing to deliver on its strategy of establishing itself in the top  3 in our industry globally. By combining our two highly complementary businesses, we are solidifying SNC-Lavalin’s position as one of the largest fully integrated professional services firms in the world, while improving our margins and balancing our business portfolio,” said Neil Bruce, President & CEO. “We are now a true global player that is in a stronger position to offer clients complementary and a wider breadth of expertise, capabilities and services. We are thrilled to welcome the employees of Atkins and the tremendous talent they will bring to our combined company. Together, we will become part of a larger global organization that will open the door to new opportunities for further growth and development.”

The acquisition of Atkins creates a global fully integrated professional services and project management company – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance. Together, we will have over 50,000 employees and annual revenues of approximately C$12 billion1. This acquisition increases our customer base, geographic reach and scale, making us a true global player with more balanced revenue coverage worldwide, while strengthening our position globally to develop and capitalize on the infrastructure, rail & transit, nuclear and renewables markets.

The acquisition is expected to improve SNC-Lavalin’s quality of earnings, adding approximately C$3.5 billion1 of consistent comparatively high-margin revenue, with ongoing revenue from framework and master service agreements, providing long-term repeat business. It further reduces our business risk profile and is expected to improve overall margins, as Atkins operates a consultancy business model, adds a significant amount of reimbursable projects, and fixed-price lump sum contracts do not carry any procurement or construction risk.

Heath Drewett, Group Finance Director and Executive Director of Atkins, now becomes President of Atkins, SNC-Lavalin’s fifth business sector, and a member of SNC-Lavalin’s executive committee, reporting directly to Neil Bruce.

“Joining SNC-Lavalin will provide us with the ability to offer our clients and employees the enhanced scale, capabilities, expertise and other benefits that come with being part of a larger and stronger global company,” said Heath Drewett, President of Atkins. “At the same time, we look forward to bringing our own unique project management, design, consulting and engineering capabilities to SNC-Lavalin’s clients. The result will be a more agile and responsive company that better meets client needs and creates cross-selling opportunities.”  

Over the coming months, teams from both organizations will work together to integrate both companies in order to create value for all stakeholders and realize expected synergies from the acquisition. SNC-Lavalin has a strong record of successful integrations and is committed to leveraging the best practices from each organization to ensure that the two companies are combined with speed, diligence and efficiency.

The acquisition is expected to deliver approximately C$120 million in cost synergies – approximately C$30 million from SNC-Lavalin and C$90 million from Atkins – by the end of the first full financial year. These synergies would mainly include eliminating corporate and listing costs, optimizing corporate and back-office functions and shared services, streamlining IT systems, and real estate consolidation where appropriate.

As previously announced by Atkins, Atkins shareholders voted in favour of the acquisition at a meeting convened by order of the High Court of Justice in England and Wales (the “Court”) and a general meeting, both held on June 26, 2017. The acquisition was structured as a scheme of arrangement and the Court sanctioned the scheme on June 29, 2017. Following the sanction of the Court, the acquisition became effective in accordance with its terms on July 3, 2017 (the “Effective Date”).

Acquisition Financing Update

The aggregate cash consideration for the acquisition of £20.80 per Atkins share in cash for a total consideration of approximately C$3.6 billion* was financed using the net proceeds from the Corporation’s previously announced C$880 million public bought deal offering of subscription receipts completed through a syndicate of underwriters; a C$400 million concurrent private placement of subscription receipts with the Caisse de dépôt et placement du Québec (the “Caisse”); a C$1.5 billion loan2 from the Caisse to SNC-Lavalin Highway Holdings Inc. (the entity that holds SNC-Lavalin’s 16.77% interest in Highway 407ETR through 407 International Inc.); a new £300 million unsecured term loan with a syndicate of North American banks as well as approximately £200 million drawn under the Corporation’s existing syndicated credit facility.

With the closing of the acquisition now effective, each subscription receipt will be exchanged for one common share in the capital of the Corporation (each, a “Common Share”) without additional consideration and without further action by the holders of subscription receipts. Holders of subscription receipts are also entitled to receive a cash amount for each subscription receipt equivalent to the dividend paid by the Corporation on each Common Share on June 1, 2017, less any applicable withholding taxes.

SNC-Lavalin expects that trading in the subscription receipts will be halted from the Toronto Stock Exchange (the “TSX”) before the opening of the market on July 4, 2017, that the transfer register maintained by the subscription receipt agent will be closed and that the subscription receipts will be delisted by the TSX after close of business on July 4, 2017. Trading on the TSX of the underlying Common Shares is expected to begin at the opening of the market on July 4, 2017.

It is expected that settlement of the consideration to which the relevant Atkins shareholders are entitled will be effected not later than 14 days after the Effective Date, in accordance with the terms of the scheme of arrangement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction. This press release does not constitute an offer to sell or the solicitation to buy securities in the United States. The securities mentioned herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

1Pro forma financials for the financial year ended December 31, 2016 based on SNC-Lavalin fiscal year ended December 31, 2016 and Atkins twelve month period ended September 30, 2016.

2This loan is secured by the full value of SNC-Lavalin Highway Holdings' shares in Highway 407 and the cash flows generated from such shares.

* Based on the offer price of £20.80 per Atkins share, multiplied by 100,110,799 Atkins shares in issue (excluding 4,341,000 ordinary shares held in treasury) as specified in the Rule 2.9 announcement published by Atkins on April 3, 2017 and by the GBP: CAD exchange rate of 1.7229 (as of 5.00 p.m. U.K. time on April 19, 2017 as per Bloomberg).

Source: SNC Lavalin

back to top
georesources.net Real PR georesources.net Trust