Atkins board agrees to acquisition

21 April 2017 The board of UK engineering giant WS Atkins has agreed terms of a cash acquisition by Canada’s SNC-Lavalin.

SNC-Lavalin will acquire the entire issued and to be issued share capital of Atkins for £20.80 per share in cash, representing an aggregate cash consideration of C$3.6bn (approx £2bn) with the combined entity “to retain the best talent across Atkins and SNC-Lavalin”. The acquisition represents an enterprise value of $4.2bn (£2.44bn), including the pension deficit.

As part of the integration process, a review of the Atkins businesses will be completed with the Atkins leadership team to determine any organizational/organisational and structural changes that should be implemented to benefit the combined entity. SNC-Lavalin does not expect this integration review to have a material impact on the continued employment of Atkins’ employees.  

Atkins has 18,000 employees with revenues of approximately £2bn in 2016. The combined entity will have 53,000 employees.

The Canadian developer said the combined entity is uniquely positioned “to capitalise on the significant investment in infrastructure projects globally but principally in North America”.

It is expected that the acquisition will be completed in the third quarter of 2017.

Heath Drewett, the current group finance director and executive director of Atkins, will be promoted to lead Atkins within the combined entity. Drewett will report into SNC-Lavalin’s president and chief executive officer and become a member of its executive committee.

The acquisition will be funded through a combination of equity and debt issuance, and supported by Caisse de dépôt et placement du Québec (CDPQ), SNC-Lavalin’s largest shareholder. The funding includes a $1.5bn loan from CDPQ, an $800m public bought deal offering, a $400m private placement with CDPQ, as well as a £300m term loan, and an approximately £350m draw on the current credit facility.

SNC-Lavalin has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets, TD Securities and BMO Capital Markets. RBC Capital Markets is acting as financial adviser and corporate broker to SNC-Lavalin. SNC-Lavalin’s legal adviser is Norton Rose Fulbright. SNC-Lavalin’s accountants are Deloitte.

Neil Bruce, president and chief executive officer SNC-Lavalin 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.”

This page was last updated on:
21 November 2017.

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