Stantec Inc. (TSE:STN, Mkt cap 3.04B, P/E 19.21, Div/yield 0.11/1.42, EPS 1.65, Shares 93.88M) believes its purchase of MWH Global, a Colorado-based global engineering, consulting and construction management firm, will position it as a global leader in water resources infrastructure.
The Canadian engineering firm announced on Tuesday (29 March) that it had come to an agreement on an all-cash deal with MWH at a price of US$793 million.
Stantec says the acquisition of MWH, which has 6,800 employees worldwide, will increase its presence in “key targeted geographies” such as Britain, Australia, New Zealand, South and Central America, Europe and the Middle East.
“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,” Stantec chief executive officer Bob Gomes is quoted in the official release.
For MWH, meanwhile, it hopes the transaction will enable it 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.”
“Our highly complementary cultures, shared approach to client service and extended global reach should yield multiple benefits for our clients, employees and the communities we serve,” added Alan Krause, MWH chairman and CEO.
Stantec said the acquisition would be financed by a combination of an equity financing and new credit facilities and is expected to generate annual cost savings of about US$25 million.
The deal is subject to the approval of at least two-thirds of MWH shareholders at a special meeting to be held this month.
Edmonton based Stantec provides planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. Stantec has 3 business operating units: Buildings, Energy & Resources, and Infrastructure. The Company’s Buildings business operating unit consists of services in architecture, buildings engineering, project management, interior design, and functional planning for vertical infrastructure. The Energy & Resources business operating unit is composed of environmental services, industrial engineering services, project management, and construction management services, primarily for private sector clients. Its Infrastructure business operating unit is engaged in the design and engineering services, and also project and construction management. More from Reuters »
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