Stantec to acquire MWH

Stantec will acquire all of the issued and outstanding capital stock of MWH for a purchase price of approximately US$793 million.

Mar 30th, 2016

(All $ figures referenced herein are to Canadian dollars, unless noted otherwise)

EDMONTON, ALBERTA and NEW YORK, March 30, 2016 -- Stantec Inc. ("Stantec" or the "Company") (TSX:STN)(NYSE:STN) is pleased to announce that it has entered into a definitive merger agreement pursuant to which it will acquire MWH Global, Inc. ("MWH"), a Broomfield, Colorado-based global engineering, consulting and construction management firm focused on water and natural resources for built infrastructure and the environment (the "Acquisition"). With the acquisition of MWH and its 6,800 worldwide employees, Stantec will gain a position as a global leader in water resources infrastructure while earning greater presence in key targeted geographies, including the United Kingdom, Australia, New Zealand, South and Central America, Europe and the Middle East.

Under the terms of the all-cash deal, unanimously approved by the boards of directors of both companies, Stantec will acquire all of the issued and outstanding capital stock of MWH for a purchase price of approximately US$793 million (the "Purchase Price"). The transaction is valued at approximately US$795 million after taking into account the estimated assumed net indebtedness of MWH, representing approximately 9.5x 2015 Adjusted EBITDA1. After giving full effect to Stantec's expected run-rate annual synergies of $33 million (approximately US$25 million), the transaction is valued at approximately 7.3x 2015 Adjusted EBITDA1. These synergies are expected to be fully realized in 2017.

"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," says Bob Gomes, Stantec president and chief executive officer (CEO). "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."

MWH has a network of approximately 187 offices in 26 countries. The firm has a history of engaging in engineering, construction and management consulting for some of the most technically significant water and natural resources projects in the world, including the Panama Canal Third Set of Locks Project.

"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," says Alan Krause, MWH chairman and CEO. "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."

Key members of the management team of MWH, including the presidents of key business units, will be joining Stantec in significant leadership positions after the Acquisition closes (the "Acquisition Closing Date"). Alan Krause and David Barnes, MWH chief financial officer, are committed to joining Stantec after the Acquisition Closing Date to ensure a smooth and successful integration.

More in Wastewater