Engineering outfit Kentz has been bought by Canadian firm SNC-Lavalin Group as it looks to expand its offerings in the oil and gas sector.
Kentz, which employs 14,500 staff and spans oil and gas, chemicals, mining and metals, was the subject of a takeover tussle between Amec and M+W Group last year, but rebuffed both offers saying the company had a future as a standalone entity.
But Montreal-based SNC said today it would buy the Jersey-based firm for about £1.16bn to allow it to carry out larger and more complex oil and gas projects as well as giving it a greater presence in key growth regions such as the Middle East, North America and Asia Pacific.
Since it went public in 2008, Kentz, a FTSE 250 company, has grown rapidly into a diversified construction company with mining, oil and gas, and infrastructure projects around the world.
UBS analyst Caroline Hickson said the past few years had been relatively quiet on the mergers and acquisitions front in the European oilfield services sector, but this deal and Amec’s purchase of Swiss-based rival Foster Wheeler for £1.9bn earlier this year could signal further activity.
"In Europe we think the deal may provide some support for other small UK names such as Hunting and Cape," Hickson said in a note to clients, adding that she saw Hunting as a more likely takeover candidate than Cape.
Neil Bruce, who left his post as Amec chief operating officer early last year and now heads SNC's resources group, said the deal would strongly position his company in attractive areas like shale gas, oil sands and liquefied natural gas.
The boards of both companies have unanimously approved the deal and the takeover will increase SNC's employee headcount to about 44,500, with 18,500 dedicated to the oil and gas sector.