Canadian engineer SNC-Lavalin Group Inc. said yesterday (20 April) that it had reached an agreement with the UK’s WS Atkins plc on the terms of a cash acquisition by which 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 CAN$3.6bn (US$2.7bn, £2.1bn).
Announcing the agreement, SNC-Lavalin said Atkins, which can trace its roots back to 1938, is "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".
Together, we will become part of a larger global organization that will open the door to new opportunities for further growth and development– Neil Bruce, SNC-Lavalin President
In 2016 Atkins had 18,000 employees with revenues of approximately £2bn, with a presence in the US, Middle East and Asia, as well as in the UK and Scandinavia.
The acquisition creates a CAN$12.1bn global professional services and project management company with 53,000 employees, and improves SNC-Lavalin’s overall margins, the Canadian company said, adding that it boosts SNC-Lavalin’s "global position and addressable market in infrastructure, rail & transit, and nuclear".
SNC-Lavalin said it would save around $120m in "cost synergies" by one year after the deal is complete – expected in the third quarter of 2017 – by eliminating corporate costs, sharing services, streamlining IT systems, and office consolidation where appropriate.
Atkins current chief executive, Dr Uwe Krueger, is to step down (Atkins)
The current chief executive of Atkins, Uwe Krueger (pictured), will step down and be replaced by Heath Drewett, Atkins chief financial officer.
As part of the integration process, a review of the Atkins businesses will be completed with the Atkins leadership team to determine any needed organisational changes.
"SNC-Lavalin does not expect this integration review to have a material impact on the continued employment of Atkins’ employees," SNC-Lavalin said in a statement.
"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," said Neil Bruce, SNC-Lavalin President & CEO. "It also creates new revenue growth opportunities in key geographies by positioning us to capitalize on increased cross-selling and the opportunity to win and deliver major projects in new regions. I look forward to welcoming Atkins’ employees into 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."
Under the terms of the acquisition, each Atkins shareholder will be entitled to receive £20.80 in cash for each Atkins share.