(Adds CEO comments on Atkins deal, context, byline, dateline)
By Allison Lampert
MONTREAL May 4 SNC-Lavalin CEO Neil
Bruce said on Thursday Elliott Capital's stake in WS Atkins
is not an "obstacle" to buying the British engineering
and construction firm, after the U.S. activist investor
disclosed a 6.8 percent shareholding last week.
Elliott said in a filing that it acquired the stake in a
contracts-for-difference deal on April 21, the day after Atkins
agreed to be acquired by the Canadian construction and
Bruce made the remark to journalists in Montreal after SNC
held its annual meeting, declared a dividend and reported higher
adjusted quarterly profits in its core engineering and
He said SNC still plans to close the deal around the end of
SNC reported C$89.7 million ($65.19 million) in net income
attributable to shareholders, down from C$122.1 million ($88.75
million) for the first three months of 2016, which included
gains from sales in its capital division.
Bruce said SNC is shortlisted for a handful of
infrastructure projects in Canada.
"I would hope that throughout 2017 we will be winning and
announcing a minimum of two projects in the infrastructure
sector," he said.
Bruce told analysts that the company still aims to meet a
core business EBIDTA (earnings before interest, tax,
depreciation and amortization) margin target of 7 percent this
year. For the quarter, the adjusted engineering and construction
EBIDTA margin rose to 5.6 percent from 5.2 percent a year
The company backed its forecast for 2017 adjusted profit
from engineering and construction of C$1.70-C$2 per share,
The deal creates a global company with C$12.1 billion in
revenues and 53,000 employees.
Canadian pension fund Caisse de depot et placement du Quebec
(CDPQ), SNC's biggest shareholder, will extend a loan of C$1.5
billion ($1.09 billion) to SNC to help finance the acquisition.
Bruce told reporters he'd be happy to do similar financing
deals with the Caisse in the future.
"It's something that's available to us that maybe isn't
available to some of our competitors," he said. "We think it's a
SNC's board declared a cash dividend of C$0.273 per share,
payable on June 1, 2017 to shareholders of record on May 18,
SNC board chairman Lawrence Stevenson said he will step down
at the end of the year.
Total revenue fell 7 percent to C$1.85 billion, and missed
analysts' average estimate of C$1.90 billion, according to
Thomson Reuters I/B/E/S.
($1 = 1.3759 Canadian dollars)
(Reporting by Allison Lampert in Montreal; Additional reporting
by John Benny in Bengaluru; Editing by Sai Sachin Ravikumar and