gbp 2.1 bn deal - SNC-Lavalin Group SNC Acquisition of WS Atkins plc by SNC-Lavalin
Summary
· The boards of directors of SNC-Lavalin Group Inc. ("SNC-Lavalin") and WS Atkins plc ("Atkins") are pleased to announce that they have reached agreement on the terms and conditions of a recommended all cash acquisition of the entire issued and to be issued share capital of Atkins by SNC-Lavalin (GB) Holdings Limited ("SNC-Lavalin Bidco") (a wholly-owned subsidiary of SNC-Lavalin).
· Under the terms of the Acquisition, each Atkins Shareholder will be entitled to receive:
for each Atkins Share: 2,080 pence in cash
· The price of 2,080 pence per Atkins Share represents a premium of approximately:
· 35 per cent. to the closing price of 1,540 pence per Atkins Share on 31 March 2017 (being the last business day before the announcement of the Possible Offer);
· 42 per cent. to the volume-weighted average price of 1,468 pence per Atkins Share for the three-month period ended 31 March 2017 (being the last business day before the announcement of the Possible Offer); and
· 44 per cent. to the volume-weighted average price of 1,449 pence per Atkins Share for the twelve-month period ended 31 March 2017 (being the last business day before the announcement of the Possible Offer).
· The Offer Price has been agreed by the boards of directors of SNC-Lavalin and Atkins on the basis that no final dividend for the financial year ended 31 March 2017 will be paid by Atkins to Atkins Shareholders. If Atkins announces, declares, makes or pays any dividend or other distribution on or after the date of this Announcement and prior to the Effective Date, SNC-Lavalin reserves the right to reduce the Offer Price by an amount equal to the amount of such dividend or distribution.
· The Acquisition values Atkins' entire issued and to be issued ordinary share capital at approximately £2.1 billion (C$3.6 billion).
· It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
· The Acquisition will create a C$12.1 billion global fully integrated professional services and project management company with 53,000 employees and significantly improve SNC-Lavalin's overall margins, and further balance its business portfolio.
· The Acquisition will enhance SNC-Lavalin's global position and addressable market in infrastructure, rail & transit and nuclear, combine two highly complementary businesses and increase both geographic reach and customer diversification globally. The Combined Entity will continue to have its head office in Montreal, Canada.
· The Atkins Directors, who have been so advised by Moelis & Company and J.P. Morgan Cazenove as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Moelis & Company and J.P. Morgan Cazenove have taken into account the commercial assessments of the Atkins Directors.
· Accordingly, the Atkins Directors confirm they intend unanimously to recommend that Atkins Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their own beneficial holdings which are under their control of, in aggregate, 139,993 Atkins Shares representing approximately 0.14 per cent. of the issued ordinary share capital of Atkins on 19 April 2017 (being the last business day before the date of this Announcement).
· The terms of the Acquisition will be put to Atkins Shareholders at the Court Meeting and the General Meeting (which is expected to immediately follow the Court Meeting). The Court Meeting and the General Meeting are required to enable Atkins Shareholders to consider, and if thought fit, vote in favour of the resolutions to approve the Scheme and its implementation. In order to become Effective, the Scheme must be approved by a majority in number of Scheme Shareholders, present and voting, whether in person or by proxy, representing 75 per cent. or more in nominal value of the Scheme Shares held by those Scheme Shareholders.
· The Acquisition will be on the terms and subject to the Conditions set out in Appendix 1 to this Announcement. Full details of the Acquisition will be set out in the Scheme Document. It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be published as soon as practicable and, in any event, within 28 days of this Announcement (unless the Panel agrees otherwise). An expected timetable of principal events will be included in the Scheme Document.
· The Acquisition is expected to become Effective in the third quarter of 2017, subject to satisfaction (or, where applicable, waiver) of the Conditions and further terms set out in Appendix 1 to this Announcement.
· Commenting on the Announcement, Neil Bruce, President & CEO of SNC-Lavalin, said:
"We are very pleased to announce this proposed acquisition that is fully aligned with our growth strategy, creating a global fully integrated professional services and project management company - including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance. By combining two highly complementary businesses, we will increase our depth and breadth of services to position us as a premier partner to public and private sector clients. It also creates new revenue growth opportunities in key geographies by positioning us to capitalize on increased cross-selling and the opportunity to win and deliver major projects in new regions. I look forward to welcoming Atkins' employees into our combined company. Together, we will become part of a larger global organization that will open the door to new opportunities for further growth and development."
· Allan Cook, the Chairman of Atkins, added:
"On behalf of our Board I am pleased to announce SNC-Lavalin's recommended cash offer to our shareholders. Having achieved our strategic target of 8% operating margin, the Atkins Directors believe that Atkins is strongly positioned to execute on its growth strategy going forward. This position is underpinned by favourable trends in our end markets, our differentiated offering, and the benefits of our new growth initiatives, including our Acuity advisory business, our positioning in the nuclear value chain and our focus on digital and technology.
However, we believe that the offer from SNC-Lavalin represents an attractive and certain value in cash today for Atkins shareholders reflecting the high quality of the business, its people and its future prospects. The Board of Atkins believes that a combination will provide clear benefits to our shareholders, enhanced opportunities for our employees as part of a larger group, and a broader service offering for our customers."
This summary should be read in conjunction with, and is subject to, the full text of the following Announcement (including its Appendices). The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following Announcement. Appendix 3 contains details of the irrevocable undertakings received by SNC-Lavalin Bidco. Appendix 4 contains information about SNC-Lavalin's financing arrangements. Appendix 5 contains the definitions of certain terms used in this summary and the following Announcement.
Conference call
SNC-Lavalin will hold a conference call today at 4:15p.m. Eastern Time to discuss the proposed acquisition of Atkins. The public is invited to listen to the conference call. Participants will be Neil Bruce, President and Chief Executive Officer of SNC-Lavalin and Sylvain Girard, Executive Vice-President and CFO of SNC-Lavalin. To join the conference call, please dial toll free at 1 866 564 7439 in North America, 416 642 5209 in Toronto, 438 968 3557 in Montreal, 080 0279 6839 in the United Kingdom, or 180 083 2679 in Ireland. A live audio webcast of the conference call and an accompanying slide presentation will be available at investors.snclavalin.com. A recording of the conference call will be available on SNC-Lavalin's website, www.snclavalin.com, within 24 hours following the call.