SNC-Lavalin Group has completed its acquisition of UK-based WS Atkins, creating a company with over 50,000 employees and annual revenues of approximately $12 billion.
“SNC-Lavalin is continuing to deliver on its strategy of establishing itself in the top 3 in our industry globally. By combining our two highly complementary businesses, we are solidifying SNC-Lavalin’s position as one of the largest fully integrated professional services firms in the world, while improving our margins and balancing our business portfolio,” said Neil Bruce, president & CEO in a company announcement.
The aggregate cash consideration for the acquisition of £20.80 per Atkins share in cash totalled approximately $3.6 billion.
The addition of Atkins extends SNC-Lavalin’s global professional services and project management offering – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance. While broadening the company’s geographic reach and overall scale, the move also strengthens SNC Lavalin’s position globally to develop and capitalize on the infrastructure, rail & transit, nuclear and renewables markets.
Adding approximately $3.5 billion of revenue, the acquisition is expected to improve SNC-Lavalin’s quality of earnings, with ongoing revenue from framework and master service agreements, providing long-term repeat business. Atkins operates a consultancy business model, and it adds a significant amount of reimbursable projects, and fixed-price lump sum contracts.
Heath Drewett, group finance director and executive director of Atkins, now becomes president of Atkins, SNC-Lavalin’s fifth business sector, and a member of SNC-Lavalin’s executive committee, reporting directly to Neil Bruce.
Teams from both organizations will work to integrate the companies with cost synergies expected to be $120 million (approximately $30 million from SNC-Lavalin and $90 million from Atkins) by the end of the first full financial year, mainly achieved by eliminating corporate and listing costs, optimizing corporate and back-office functions and shared services, streamlining IT systems, and real estate consolidation where appropriate.