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URS in CAD 1.25 bn takeover of Flint Energy
Posted on Tuesday, 21 February 2012 16:20
US engineering firm URS Corporation has announced an offer for Flint Energy Services, a Canadian energy and resource construction business, for CAD 1.25 billion.
Flint, based in Calgary and listed on the Toronto Stock Exchange, provides upstream and midstream construction and production services for the oil and gas industry.
The company employs 9,500 staff in over 82 locations across Canada and the US.
URS has offered CAD 25.00 in cash per Flint share, representing a 67.8 per cent increase on the company’s previous close of CAD 14.90, and will assume around CAD 225.00 million of the target’s debt.
The deal, which is scheduled to complete during the second quarter of 2012, has been approved by both companies’ boards of directors, but is subject to approval from Flint shareholders and regulators.
Martin Koffel, URS chairman and chief executive, said of the deal: “Expanding our presence in the oil and gas sector has been a longstanding strategic priority for URS. Through this combination, URS will be well positioned in segments of the oil and gas industry that we expect to have attractive margins and growth rates. In addition, by joining with URS, Flint will be able to offer its base of multinational clients the full range of engineering, procurement and construction management services through URS’ existing operations.”
Stuart O’Connor, chairman of Flint’s board of directors added: “We are very pleased with the arrangement with URS. It delivers a significant cash premium to our stockholders while also allowing Flint to accelerate the growth of its business by offering a more complete suite of services to clients.”
Flint had a turnover of more than USD 1.70 billion for the 12 months up to 31st December 2010 and URS expects that the company will add around USD 3.50 billion to its book of business on completion of the takeover.
URS stated that it will be looking to make further acquisitions when its debt levels have been reduced.
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