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SNC-Lavalin to Buy Kentz for $1.97 Billion

SNC-Lavalin Group Inc. (SNC), Canada’s largest engineering company, agreed to buy Kentz Corp. (KENZ) for 1.16 billion pounds ($1.97 billion) to expand its operations in the oil and gas industry.

The Montreal-based engineer will pay 935 pence a share, a 33 percent premium to last week’s close, it said in a statement today. The board of Kentz recommended the offer to shareholders.

SNC-Lavalin, funding the deal with cash and new credit, said oil and gas offers higher growth than other infrastructure and it expects a contribution to earnings within the first year.

Kentz rose as much as 34 percent to a record 940.5 pence in London and was trading at 929 pence by 12:25 p.m. local time.

“This acquisition will be an important milestone in our stated strategy for growth,” Robert Card, president and chief executive officer at SNC-Lavalin, said in the statement. “It complements our client offering, further broadens our geographic reach in high-growth regions, and is expected to drive future revenue growth and cross-selling opportunities.”

Kentz was approached last year by companies including Amec Plc, a U.K. engineer whose proposal was rejected for being too low.

“Although the board of Kentz believes the company has a strong future as an independent business, it considers that this cash offer substantially recognizes the company’s growth prospects, providing certainty, in cash, to Kentz shareholders today,” Christian Brown, CEO of Kentz, said in the statement.

 

Ref: Bloomberg

 

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