Montreal-based engineering firm SNC-Lavalin announced its purchase of Kentz Corporation. Kentz Corporation operates in the oil and gas, petrochemical and mining and metals sectors, providing engineering, construction and technical support services worldwide.
The acquisition of the London Stock Exchange-listed international engineering company is set to be finalized in the third quarter of this year. After SNC completes the acquisition of Kentz, the two oil and gas teams of both companies will be fused together and led by Kentz Chief Executive Officer Christian Brown. Kentz current oil and gas team has 14,500 employees in 36 countries. Brown will then be reporting to SNC-Lavalin’s President of Resources, Environment and Water Neil Bruce.
In a press release, SNC-Lavalin said the purchase is in line with its thrust towards becoming a Tier-1 engineering and construction firm. SNC strives for a leading footprint in oil and gas, two sectors known for producing high margins. As a result of the purchase, the Montreal-based firm expects to increase the percentage of its yearly oil and gas revenue to about 24 percent from its present 7 percent. Because Kentz bought Valerus Field Solutions in January this year, the merger will also improve SNC-Lavalin’s LNG expertise. It also expects revenue increase in its operations in the Middle East, Asia Pacific and Australia.
The transaction was approved by both companies board of directors. Under the terms of the deal, SNC-Lavalin will buy the ordinary share capital of Kentz. Each shareholder of Kentz will be receiving £9.35 (C$17.13) in cash for every share they own in the company. A $2.55 billion asset sale bridge loan and a $200 million term loan will finance the purchase.
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