Seeking to boost its profile in construction and in the energy sector, global engineer SNC-Lavalin, Montreal, said June 23 it has agreed to acquire U.K.-based Kentz Corp. Ltd. for about $2 billion.
The addition of Kentz, with 14,500 employees in 36 countries, would create a giant with 44,500 staff and backlog of more than $12 billion.
The combination "will make SNC-Lavalin a leading global E&C player in the oil-and-gas sector, with a greater presence in key growth regions," said the Canadian firm, which expects to close the deal in the third quarter.
Maxim Sytchev, E&C sector analyst for Dundee Securities, Toronto, termed Kentz "a high-performing asset that increases SNC's exposure to lower-risk services." Analyst Jamie Cook of Credit Suisse says 78% of Kentz's construction management business is cost-plus.
The firm acquired late in 2013 Valerus FS, a Houston oil-and-gas services firm.
Kentz also last year rejected buyout offers from AMEC and M+W Group that it said were too low; observers speculate that SNC Lavalin also put in a bid at the time.