Edmonton-based Stantec strikes deal to sell international construction arm
Company sold to L.A. purchaser Oaktree Capital
Canadian engineering-design giant Stantec Inc. is selling its construction arm in a much-anticipated deal following a review begun last spring of how to best extract value from the operation it bought two and a half years ago.
The Edmonton-based company says it has an agreement to sell MWH Constructors, including its U.K. and U.S. divisions and subsidiary Slayden Constructors, Inc., to funds managed by Oaktree Capital Management, L.P., of Los Angeles.
No financial details were provided but RBC analyst Derek Spronck said in a report he estimates Stantec will get proceeds of between $250 million and $350 million, assuming the price is five to seven times adjusted earnings.
The construction company, which focuses mainly on water and wastewater projects in the United States and the United Kingdom, was included in Stantec's $1-billion purchase of Colorado-based engineering, consulting and construction firm MWH Global, Inc. in 2016.
The purchase also included water software business, Innovyze, Inc., which Stantec sold for $359 million in 2017.
In a news release, Stantec says selling both allows it to continue to focus on its core consulting services business globally. The company says on its website it has 22,000 staff in 400 locations on six continents.