London-listed engineering firm Kentz Corporation surged in trading yesterday after its board backed a £1.2bn takeover by SNC-Lavalin, months after it rejected a rival bid.
The British business will be taken over for 935p a share in an all-cash deal by the Canadian group. The price is a 33 per cent premium to last week’s closing price.
Kentz boss Christian Brown will join the merged company to lead the oil and gas units of the business as part of the proposal, which still needs to be approved by shareholders.
It comes in the wake of a previous takeover offer in September by FTSE 100 oil and gas company Amec, which offered between 565p to 580p a share for the company. The offer was subsequently rejected by Kentz.
Kentz has operations across 36 countries and has 14,500 people working for the group.
The deal marks the biggest takeover ever for SNC and is the Canadian giant’s first foray into the M&A sector for many years.
Merging Kentz into the group will boost its total headcount from around 30,000 to 45,000.
SNC boss Robert Card said: “We look forward to adding Kentz to our group and significantly strengthening our capabilities in the oil and gas sector.”
The deal will close next quarter if it wins shareholder support.
BEHIND THE DEAL
RBC | KEVIN SMITH
1 Kevin Smith joined RBC in 2010 where he went on to become its European head of M&A, he previously worked at Wachovia Securities where he was managing director.
2 SNC-Lavalin took financial advice from Smith along with Michael Fortier and Peter Buzzi. Morgan Stanley’s Dougal Macdonald, Paul Radchuck and Adrian Doyle also advised.
3 It took legal advice from a Norton Rose Fulbright team including Raj Karia, Stephen Kelly, Paul Whitelock, Andrew Phillips, Robert Borduas, James Dunnett, Ian Giles and Richard Wagner.
INVESTEC | CHRIS SIM
1 Chris Sim joined Investec in January 2012 from Evolution Securities, where he was director of corporate broking for seven years.
2 On yesterday’s SNC-Lavalin deal Kentz took financial advice from Sim as well as Investec’s Duncan Williamson, George Price and Symmie Swil.
3 Sim also advised Kentz during its $434m acquisition of Valerus in 2013. Kentz is taking legal counsel from Simmons & Simmons’ Edward Baker.