Canadian contractor SNC-Lavalin has reached an agreement to acquire UK-based oil & gas engineering services Group Kentz for UK£ 1.2 billion (US$ 2 billion). The deal has been approved by the Kentz board.
Kentz has 14,500 employees and operates in 36 countries around the world. It provides engineering, construction and technical support services to the oil & gas sector. SNC-Lavalin said the addition of Kentz would make it a leading global player in the oil & gas engineering and construction sector.
SNC-Lavalin president & CEO Robert G. Card said, “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.”
The deal will see SNC-Lavalin pay UK£ 9.35 (US$ 15.58) per share for Kentz, which it says represents a 33% premium on the company’s share price on the day prior to the acquisition announcement.
The acquisition will increase SNC-Lavalin’s headcount to some 44,500 employees, 18,500 of whom will be in the oil & gas division. The company added that it expected to achieve annual savings and synergies of CA$ 50 million (US$ 48 million) in the first full year following the acquisition. It will also take SNC-Lavalin’s total backlog to some CA$ 4.9 billion (US$ 4.7 billion).
Last year saw Kentz rebuff takeover offers from both Amec and M&W. Those deals valued the company at only about half of the offer on the table from SNC-Lavalin.
The deal is expected to close in the third quarter of the year.