Kentz sold to Canada's SNC-Lavalin for almost $2 billion

Monday 23 June 2014 16.28
Based in Clonmel, Kentz provides engineering, construction and technical support services to the oil and gas and mining industries
Based in Clonmel, Kentz provides engineering, construction and technical support services to the oil and gas and mining industries

Co Tipperary-based energy services provider Kentz has been bought by Canadian engineering and construction company SNC-Lavalin Group about £1.164 billion ($1.98 billion) in cash. 

SNC said the acquisition of Kentz would make it a leading global player in the oil and gas sector.

It said the deal would give it a greater presence in key growth regions such as the Middle East, North America and Asia Pacific, along with a significant presence in Australia. 

SNC-Lavalin said each Kentz shareholders would receive 935 pence per share, a premium of 33% to its close on the London Stock Exchange on Friday. 

SNC said it expected the Kentz deal to boost its earnings within the first full financial year after closing.

The deal, which the boards of both companies have unanimously approved, is expected to raise SNC-Lavalin's overall backlog by about $4.9 billion Canadian dollars ($4.5 billion) to about $13 billion. 

This takeover will boost SNC-Lavalin's employee headcount by about 14,500, creating a combined company of about 44,500, with 18,500 dedicated to the oil and gas sector.

Based in Clonmel, Kentz is listed on the London stock exchange and provides engineering, construction and technical support services to the oil and gas and mining industries around the world.

Its customers include Chevron, Royal Dutch Shell, BP and Exxon Mobil and it has operations in Australia, Russia, Africa, the Middle East and the US.

Since it went public in 2008, Kentz has grown rapidly into a diversified construction company. It came close to a sale last year. Germany's M+W Group and British rival Amec submitted offers for Kentz early in 2013, but both were rejected. 

Amec's bid of £680m was substantially lower than SNC's. Amec earlier this year struck a deal to acquire Swiss-based rival Foster Wheeler for £1.9 billion.