SNC-Lavalin Group Inc. (SNC-Lavalin or the corporation) has completed its acquisition of WS Atkins plc (Atkins), one of the world's most respected consultancies in design, engineering and project management, with a leadership position across the infrastructure, transportation and energy sectors. Headquartered in the UK, Atkins is a geographically diversified global company with approximately 18 000 employees in the US, Middle East and Asia, together with a leading position in the UK and Scandinavia.
The acquisition is expected to improve SNC-Lavalin's quality of earnings, adding approximately CAN$3.5 billion of consistent comparatively high-margin revenue, with ongoing revenue from framework and master service agreements, providing long-term repeat business. It further reduces business risk profile and is expected to improve overall margins, as Atkins operates a consultancy business model, adds a significant amount of reimbursable projects, and fixed-price lump sum contracts do not carry any procurement or construction risk.
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.
"Joining SNC-Lavalin will provide us with the ability to offer our clients and employees the enhanced scale, capabilities, expertise and other benefits that come with being part of a larger and stronger global company," said Heath Drewett, President of Atkins. "At the same time, we look forward to bringing our own unique project management, design, consulting and engineering capabilities to SNC-Lavalin's clients. The result will be a more agile and responsive company that better meets client needs and creates cross-selling opportunities."
The acquisition is expected to deliver approximately CAN$120 million in cost synergies – approximately CAN$30 million from SNC-Lavalin and CAN$90 million from Atkins – by the end of the first full financial year. These synergies would mainly include eliminating corporate and listing costs, optimising corporate and back-office functions and shared services, streamlining IT systems, and real estate consolidation where appropriate.
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