SNC-Lavalin buys WS Atkins

Canada’s SNC-Lavalin has agreed to acquire WS Atkins, an engineering, design and project management consultancy firm from the UK, amidst ongoing sector consolidation.

Announced before the start of the weekend, the deal represents an aggregate cash consideration of USD 3.6 billion.

SNC-Lavalin will tap a USD 1.5-billion loan from Caisse de dépôt et placement du Québec to finance the acquisition, in addition to USD 800 million public subscription receipts and a further USD 400 million privately placed ones.

The deal creates a professional services and project management entity worth USD 12.1 billion that employs 53,000 people. It is also evidence of ongoing consolidation efforts in the engineering and project management sector.

In 2014, SNC-Lavalin acquired Kentz Corporation in a bid to bolster its oil and gas activities. That same year, Amec bought Foster Wheeler. Last month, the combined entity said it was looking to be acquired by Wood Group.

In comments on last week’s acquisition, SNC-Lavalin President and CEO Neil Bruce said it would create “a global fully integrated professional services and project management company.”

He added that the deal would help open up “new revenue growth opportunities in key geographies.”

Synergies from absorbing WS Atkins are expected to be in the range of USD 120 million in the first full year following the deal.