CDPQ invests $1.9B to back SNC-Lavalin’s $3.6B WS Atkins acquisition

SNC-Lavalin Group Inc. (TSX: SNC) has reached an agreement to acquire the entire issued and to be issued share capital of WS Atkins plc (LSE: ATK) for £20.80 per share in cash, representing an aggregate cash consideration of approximately £2.1 billion or CND $3.6 billion.

Headquartered in the UK, Atkins is 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. Tracing its roots back to 1938, Atkins today has 18,000 employees with revenues of approximately £2.0 billion in 2016, and is geographically diversified in the US, Middle East and Asia, together with a leading position in the UK and Scandinavia.

The acquisition will be funded through a combination of equity and debt issuance, and supported by Caisse de dépôt et placement du Québec (CDPQ), SNC-Lavalin’s largest shareholder.

As of March 13, 2017, CDPQ beneficially owned, or controlled or directed, directly or indirectly, 18,504,200 common shares, representing 12.3% of the outstanding common shares.  Following the closing of the acquisition, CDPQ will increase its stake in SNC-Lavalin in addition to a stake in 407 International Inc.

The acquisition financing package consists of

  • $1.5 billion loan from CDPQ to SNC-Lavalin Highway Holdings Inc., the entity that holds SNC-Lavalin’s 16.77% interest in Highway 407ETR through 407 International Inc.;
  • $800 million public subscription receipts co-led by RBC Capital Markets, TD Securities and BMO Capital Markets on a bought deal basis backstopped by an $800 million unsecured bridge credit facility with a syndicate of North American banks;
  • $400 million privately placed subscription receipts with CDPQ backstopped by a $400 million unsecured bridge credit facility with CDPQ;
  • approximately £350 million to be drawn under its existing $4.25 billion syndicated credit facility backstopped by a £400 million unsecured bridge credit facility with a syndicate of North American banks;
  • a new £300 million unsecured term loan with a syndicate of North American banks.

This $1.5 billion loan is secured by the full value of SNC-Lavalin Highway Holdings’ shares and the cash flows generated from such shares. The loan has been structured to be of a non-recourse nature as against SNC-Lavalin. Upon closing of the acquisition, CDPQ will be entitled to a non-refundable capital commitment payment of $16 million (4% of the $400 million aggregate purchase price for subscription receipts).

RBC Capital Markets is acting as financial adviser and corporate broker to SNC-Lavalin. SNC-Lavalin’s legal adviser is Norton Rose Fulbright. Davies Ward Phillips & Vineberg LLP acts as legal counsel to CDPQ.

Moelis & Company acts as financial adviser to Atkins.

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal,,, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's, Canada's most sophisticated and advanced all private capital and public market financing database.