SNC-Lavalin looking at $3.5B takeover of WS Atkins
Acquisition would increase its exposure to infrastructure and power markets in Europe and/or Asia.
MONTREAL — SNC-Lavalin is in talks to acquire WS Atkins PLC, an engineering and project management consultancy based in London, for the equivalent of C$3.5 billion.
WS Atkins said its board is prepared to recommend the offer, subject to reaching agreement on other possible terms and conditions, but warned there is no guarantee that a deal will be concluded.
The company said under the rules governing takeovers and mergers, SNC-Lavalin is required to make a firm offer or withdraw by May 1.
For its part, SNC-Lavalin said any firm offer would be subject to the satisfaction of a number of pre-conditions including the recommendation of the board of directors for WS Atkins. SNC-Lavalin said it also reserves the right to make a lower offer depending on the circumstances.
SNC-Lavalin said if the deal was to proceed as it is currently contemplated, up to $1.9 billion will come from Caisse de depot et placement du Quebec in the form of $400 million in equity and a $1.5 billion non-recourse loan secured by its interest in Highway 407 in Ontario. The balance would be raised using a mix of additional debt and equity and other financing.
Canaccord Genuity analyst Yuri Lynk estimated the deal values WS Atkins’s equity at $3.5 billion, and $3.7 billion including debt.
Lynk said SNC-Lavalin has been vocal about wanting to acquire a company that would increase its exposure to infrastructure and power markets while also giving it a presence in Europe and/or Asia.
`With the exception of adding meaningful Asian exposure, we believe Atkins meets all of these requirements,” Lynk said.