Canadian design firm Stantec Inc. has acquired engineering, consulting and construction management group MWH Global Inc. for a purchase price of about US$793 million.
The all-cash deal — valued at $795 million accounting for net indebtedness assumed from MWH — was unanimously approved by the boards of directors for both companies yesterday and reflects Stantec’s desire to cultivate a “greater presence in key targeted geographies, including the United Kingdom, Australia, New Zealand, South and Central America, Europe and the Middle East.”
Said Stantec president and CEO Bob Gomes, “MWH brings a global presence and reputation in water infrastructure that will advance Stantec’s position as a top-tier design firm within the highly attractive global water market. Together, we share a commitment to our communities and have the combined talent to support the most technically advanced clients and projects locally and around the world.”
Based in Broomfield, Colo., MWH Global has about 190 offices in more than 26 countries. The company has been involved in the development and rehabilitation of numerous hydroelectric projects worldwide, including Pakistan’s 102-MW Gulpur and 4,500-MW Diamer Bhasha, Malaysia’s 1,400-MW Baleh and Argentina’s 1,890-MW Salto Grande, amongst many others.
“We are excited to join the expertise and experience of Stantec and MWH in a transaction that will enable us to thrive and grow amidst an increasingly complex industry landscape by strengthening our combined ability to solve the most pressing water, transportation and infrastructure challenges today,” MWH chair and CEO Alan Krause said. “Our highly complementary cultures, shared approach to client service and extended global reach should yield multiple benefits to our clients, employees and the communities we serve.”
Krause and other key executives from MWH, including chief financial officer David Barnes, are expected to join Stantec in “significant leadership positions” after the acquisition closes to “ensure a smooth and successful integration.”
The deal must still be approved by at least two-thirds of MWH Global’s shareholders during a special meeting expected to be held in April 2016. The acquisition will then be subject to governmental approval, with a final closing expected in the second quarter of this year.
“Given the quality and the geographic diversification of cash flows generated by our joint operations, we expect our financial positions to remain strong,” Stantec executive vice president and chief financial officer Dan Lefaivre said. “In the quarters to come, our focus will be on integrating and optimizing our combined operations, and achieving the operational performance our shareholders have come to expect.”
For more business and finance news, visit here.