SNC-Lavalin completes landmark acquisition of Kentz
MONTREAL, Canada -- SNC-Lavalin Group Inc reported that it has completed its acquisition of Kentz Corporation Limited, a global company with 15,500 employees operating in 36 countries. Kentz provides industry-leading engineering, construction management and technical support services to clients in the oil and gas sector.
The acquisition of Kentz supports SNC-Lavalin’s ongoing transformation into a global Tier-1 engineering and construction (E&C) company. The transaction creates a group with approximately 45,000 employees, annual revenues of about $9.13 billion (C$10 billion) and a backlog of roughly $11.88 billion (C$13 billion) as per 2013 figures. The combined company will also have a strong position in the world’s most dynamic growth markets, including the Middle East, North America, Latin America and Asia-Pacific.
“SNC-Lavalin is thrilled to welcome the employees of Kentz, who are the heart and soul of the remarkable company we are acquiring today,” said Robert G. Card, President and CEO, SNC-Lavalin Group Inc. “We expect that our combined capabilities will give us one of the best broad-based service offerings in the E&C industry, while expanding our presence in key growth markets.”
Transformational growth in oil and gas
The acquisition of Kentz transforms SNC-Lavalin’s oil and gas capabilities, creating a group of approximately 20,000 high-caliber employees with industry leading expertise for large and complex projects in the upstream, LNG, unconventional (shale gas and oil sands), pipelines, offshore jackets and steam-assisted gravity drainage (SAGD) sectors.
“We have now begun implementing our plan, which aims to ensure our teams are combined efficiently, respectfully and as rapidly as possible,” said Neil Bruce, President, Resources, Environment & Water, SNC-Lavalin Group Inc. “We will be bringing together the best capabilities of our two firms for the direct benefit of our clients. Our goal will be to build strong and lasting relationships with our customers through consistently delivering on our commitments and providing the best mix of value and services.”
Kentz will be incorporated into SNC-Lavalin while simultaneously integrating SNC-Lavalin’s current Oil & Gas business into Kentz’s operations. Christian Brown, Kentz’s CEO, now becomes President, Oil & Gas, SNC-Lavalin Group Inc. Mr. Brown will continue to be stationed in Houston, Texas, and will report directly to Neil Bruce.
“Joining SNC-Lavalin will provide us with the ability to execute larger scopes for major projects, and enhance our access to new geographies in both North America and Latin America,” said Christian Brown. “We look forward to bringing our clients complete end-to-end solutions for their projects by merging SNC-Lavalin’s strong front-end engineering and design capabilities with our industry-leading construction management, commissioning and operations capabilities.”
SNC-Lavalin paid $15.49 (£9.35) per share for a total purchase price of approximately $1.9 billion (£1.2 billion). Kentz shareholders voted in favour of SNC-Lavalin’s offer at a meeting convened by order of the Court and an Extraordinary General Shareholders Meeting, both held on August 11, 2014. The offer was structured as a Scheme of Arrangement and the Scheme Court Hearing was held on August 21, 2014. Following the sanction of the Court, the acquisition became effective in accordance with its terms on August 22, 2014.