SNC-Lavalin Group Inc. has reached an agreement with Kentz Corporation Limited (Kentz), approved by the boards of directors of both companies, on the terms of a cash acquisition by which the entire ordinary share capital of Kentz will be acquired by SNC-Lavalin.
The proposed acquisition of Kentz is fully aligned with SNC-Lavalin’s strategy of becoming a global Tier-1 engineering and construction (E&C) services firm. The addition of Kentz’s capabilities will make SNC-Lavalin a leading global E&C player in the oil and gas sector, with a greater presence in key growth regions, including the Middle East, North America and Asia Pacific, with a significant presence in Australia.
SNC-Lavalin Group CEO, Robert G. Card, commented: “We look forward to adding Kentz to our group and significantly strengthening our capabilities in the oil and gas sector. We are excited by the prospect of merging the excellent capabilities of our two oil and 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. This proposed acquisition and the agreement to sell AltaLink are important milestones in our stated strategy for growth. Together, they give us confidence to increase our focus on the disposition of other mature assets.”
Kentz CEO, Christian Brown, added: “On behalf of our Board I am pleased to announce SNC-Lavalin’s recommended cash offer to our shareholders, which has received unanimous support from our Board members. We feel that the Offer recognises the value of our future prospects, world-class client base, and our excellent people; the ultimate assets of our business. It also offers certainty, in cash, to Kentz Shareholders today.
“Our track record in providing complex engineering and construction solutions to the energy sector globally, has evolved considerably from our first international projects in the 1970s, and many of the people instrumental to our growth remain with us today. We have a bright future and I believe that SNC-Lavalin’s technical abilities and scale can support our continued success and bring further benefits to our employees, clients, and partners. I would like to extend my personal gratitude to all of the people that make Kentz what it is and look forward to continuing our success together.”
The proposed acquisition of Kentz significantly increases SNC-Lavalin’s exposure in the higher margin oil and gas sector, and is expected to raise the percentage of its annual revenue derived from oil and gas services from 7% to approximately 24%. It also adds upstream capabilities, LNG expertise, as well as unconventional oil and gas capabilities to SNC-Lavalin – in the oil sands, and in the shale gas growth sector following Kentz’s acquisition of Valerus Field Solutions in January 2014.
“We are thrilled at the prospect of joining forces with Kentz, a company with an excellent reputation, repeat business from satisfied clients and an extensive track record for high-quality work. This acquisition complements our existing client offering, further broadens our geographic reach in high-growth regions, and is expected to drive future revenue growth and cross-selling opportunities. By increasing our mid- and upstream greenfield capabilities in oil and gas, as well as enhancing our ability to efficiently complete, commission and provide asset support for projects, we will jointly be better able to help clients maintain and enhance their facilities affordably, safely and efficiently,” concluded Neil Bruce, President, Resources Environment & Water, SNC-Lavalin Group.