Feb 8 (Reuters) - British engineering and design consultancy WS Atkins is examining potential acquisitions, its chief executive said, but he declined to say if it had been approached by U.S. rival CH2M over a $4 billion merger.
Dealmaking in engineering and construction has picked up in recent years, including a failed attempt by Britain’s Carillion to merge with Balfour Beatty.
Atkins has been trying to diversify away from its home market, which accounts for over half of its revenue, and the U.S. is looking attractive for infrastructure spending.
“We see very interesting signs that what was regarded as pre-election rhetoric is now really coming together quite nicely,” CEO Uwe Krueger said after a trading update.
Atkins, which worked on London’s 2012 Olympic site as well as a renovation of New York’s Statue of Liberty, was seeking deals in the United States, Middle East and Asia Pacific as well as to grow its energy business, Krueger added on Wednesday.
“At any point in time we’re looking at quite a number of acquisition opportunities... Whatever makes sense from a commercial and strategic perspective, we will be looking at it whether it’s small, medium-sized or large,” he told Reuters.
Krueger, however, declined to comment on a January report in the Times that said privately owned CH2M made an approach for Atkins at a senior level over a $4 billion merger.
“We have a strict policy that we do not comment on rumour or speculation so there’s really nothing to add,” he said.
Shares in Atkins, which maintained its full-year outlook targets and reported in-line third-quarter trading, were up 1.7 percent at 1,504 pence at 1013 GMT, giving it a market value of about 1.5 billion pounds.
A merger with CH2M would increase Atkins’ U.S. footprint to greater than 50 percent of group sales and strengthen its position in energy, water and transportation, according to Liberum, which has a “buy” rating and 1,600 pence target price.
Atkins said on Wednesday its financial position remained strong. Liberum, which said rumours of a deal between Atkins and CH2M was “credible”, estimated net cash of 27.4 million pounds for the year ending March 2017. (Editing by Alexander Smith)