North American design firms Stantec, The Keith Companies to combine

Canada's Stantec to obtain U.S. listing for stock market once merger complete...

EDMONTON, Alberta, and IRVINE, Calif., April 14, 2005 (PRNewswire-FirstCall) -- Canada's Stantec and The Keith Companies have entered into an agreement to combine the two firms. The agreement, which has been approved by the boards of directors of Stantec and The Keith Companies (TKC), will help both companies realize strategic business goals benefiting employees, clients, and shareholders.

TKC shareholders will receive about US$22.00 per share in cash, Stantec common shares, or a combination of cash and Stantec common shares. The transaction is expected to be accretive to Stantec's earnings while significantly strengthening the firm's presence in the US by adding 10 locations throughout southern California and about 850 employees. TKC also has offices in Portland, Oregon; Las Vegas, Nevada; Phoenix, Arizona; Houston, Texas; Salt Lake City, Utah; and Ann Arbor, Michigan. Stantec provides professional design and consulting services in planning, engineering, architecture, surveying, and project management and has over 4,200 employees in 50 locations throughout North America.

The transaction is subject to customary conditions, including approval of the transaction by TKC's shareholders and expiration of the waiting period under the Hart Scott Rodino Act. Stantec's shareholders will not be required to vote on the transaction.

The merger agreement anticipates that Aram Keith, TKC chairman and CEO will become a director of Stantec following completion of the transaction. The transaction is expected to close in the third quarter of 2005.

"The addition of TKC will increase the revenue of our operations in the United States by about seventy per cent -- based on 2004 numbers," says Tony Franceschini, Stantec president and CEO. "The combination of Stantec and TKC will make up one of the most diversified design firms in North America and a leading urban land development services group."

In 2004 TKC's gross revenues were US$105.3 million (C$137.7 million) and Stantec's gross revenues were C$520.9 million (US$398.4 million).

"With TKC, Stantec will gain a strong presence in California -- a key market in North America -- and an opportunity to lever this local base to cross sell our public sector services in Transportation and Environment," adds Franceschini. "This is a key strategic move in our plan to become a top 10 global design firm."

Stantec provides professional design and consulting services in planning, engineering, architecture, surveying, and project management and supports public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Stantec's services are offered through more than 4,200 employees operating out of about 50 locations in North America and the Caribbean.

"This is an exciting transaction for The Keith Companies' employees, clients, and shareholders," says Aram Keith, TKC Chairman and CEO. "Joining Stantec will substantially accelerate our growth plans and make TKC a part of a North American firm with a widely diversified service offering. Our employees will have access to more service specialists, experts, and greater technological resources while our clients will gain access to a wider range of services."

"Our shareholders will receive an immediate premium upon the close -- Stantec's offer represents an approximate 30% premium to TKC's closing price on April 14 -- and they will have the opportunity to reinvest in the combined company and take advantage of the revenue and cost synergies that should result from the combination," adds Keith.

TKC (www.keithco.com), based in Irvine, Calif., is a multi-disciplined engineering and consulting services company. With about 850 staff, TKC provides a wide spectrum of skilled resources including land planning, engineering, surveying, mapping, environmental studies, and water and cultural resources. Additionally, TKC provides mechanical, electrical, chemical, power/energy engineering, and other industrial engineering services to design and improve the efficiency and reliability of automated and manufacturing processes, production lines, and fire protection systems. TKC benefits from a diverse public and private client base varying from residential and commercial real estate projects to institutional, manufacturing, and processing facilities.

In connection with the transaction, Stantec (www.stantec.com) plans to list its shares on a major U.S. stock exchange, while maintaining its listing on the Toronto Stock Exchange. The issuance of Stantec shares in connection with the transaction is also subject to approval of the TSX.

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