Transaction unlocks significant value in support of the Company's Strategic Plan
MONTREAL, May 1, 2014 /CNW Telbec/ - SNC-Lavalin (TSX: SNC) is pleased to announce it has entered into a binding agreement to sell 100 percent of its interest in AltaLink, Alberta's largest regulated electricity transmission company, to Berkshire Hathaway Energy. Based on the terms of the agreement and assuming a December 31, 2014 closing date, gross proceeds to SNC-Lavalin from the sale will be approximately $3.2 billion.
The sale of AltaLink represents another significant step in the execution of the Company's Strategic Plan. Announced in May 2013, SNC-Lavalin's Strategic Plan involves actively managing its portfolio of infrastructure concession investments to unlock and create value that supports its future growth as a Tier-1 services provider in key engineering and construction (E&C) markets, among other objectives. The Company is currently targeting accelerated development in its Resources (Oil & Gas, Mining & Metallurgy and Environment & Water), Infrastructure and Power E&C businesses, with a geographic emphasis on North America, South America and the Middle East.
"After a robust process that drew considerable interest, we are very pleased to announce a transaction that recognizes significant value for AltaLink--a unique regulated asset in a high-growth electricity market--while also providing for a continued relationship with SNC-Lavalin. I would like to thank AltaLink's employees, who have helped make their company so successful. I know they will have a bright future and benefit from enhanced career opportunities as part of Berkshire Hathaway Energy," said Robert G. Card, President and Chief Executive Officer, SNC-Lavalin Group Inc. "The sale of AltaLink will help us build value for our Company by providing opportunities to advance our E&C growth strategy. The use of capital will be determined based on the best long-term interests of SNC-Lavalin," he added.
"Our excellent relationship over the past decade with AltaLink allowed us to develop an outstanding asset, while growing our engineering and construction team and maintaining strong expertise in the transmission and distribution of energy--a sector in which we aspire to be a global leader," added Gerry Grigoropoulos, Acting Executive Vice-President, Infrastructure Concession Investments (ICI), SNC-Lavalin Group Inc. "As such, this agreement is a successful example of our ICI strategy, which focuses on maximizing the synergies between our asset management expertise and project capabilities to create value for our Company and its shareholders."
SNC-Lavalin and MidAmerican Transmission, a subsidiary of Berkshire Hathaway Energy, have also mutually agreed to develop engineering, procurement and construction opportunities in the US and Canada within independent system operators and regional transmission organizations. Through the agreement, the parties will look to emerging transmission investment opportunities in these countries. The agreement combines the engineering and construction management strengths of SNC-Lavalin with the strong track record of MidAmerican Transmission on joint transmission projects with other entities.
"We are pleased with our agreement with MidAmerican Transmission to pursue transmission and distribution development opportunities, which will allow us to enhance our existing energy infrastructure investment portfolio," said Alexander Taylor, President, Power, SNC-Lavalin Group Inc.
Completion of the sale is subject to customary regulatory approvals, including approval by the Alberta Utilities Commission and approvals pursuant to the Competition Act and Investment Canada Act.
Morgan Stanley and RBC Capital Markets acted as financial advisors to SNC-Lavalin on the AltaLink divestiture process, and Norton Rose Fulbright Canada acted as external legal advisors.
As SNC-Lavalin is in the process of finalizing its analysis of the specific impacts of this transaction on the Company's financial statements and results, it will provide a revised outlook and guidance on a pro-forma basis giving effect to the transaction when it announces and releases its financial and operating results for the first quarter of 2014 on May 8, 2014.
An SNC-Lavalin representative is available for one-on-one media interviews regarding this announcement.
About Berkshire Hathaway Energy
Berkshire Hathaway Energy owns a portfolio of locally managed businesses that share a vision for the energy future, make sustainable investments to achieve that vision, and had $70 billion of assets as of Dec. 31, 2013. These businesses deliver safe, reliable service each day to more than 8.4 million customers and end-users around the world and consistently rank high among energy companies in customer satisfaction. Berkshire Hathaway Energy is headquartered in Des Moines, Iowa, U.S.A.
About MidAmerican Transmission
MidAmerican Transmission, a subsidiary of Berkshire Hathaway Energy, is committed to the development and long-term ownership of transmission lines throughout the U.S. and Canada. The company has developed approximately $1.6 billion of transmission projects at 345 kilovolts and higher and has experience in traditional utility and stand-alone transmission projects.
SNC-Lavalin is one of the leading engineering and construction groups in the world, and is a major player in the ownership of infrastructure and in the provision of operations and maintenance services. Founded in 1911, SNC-Lavalin has offices across Canada and in over 40 other countries around the world, and is currently active in some 100 countries. www.snclavalin.com
Founded in 2002, AltaLink is Canada's only fully independent transmission company. It maintains and operates approximately 12,000 kilometres of transmission lines and 280 substations in Alberta. AltaLink also owns more than half of Alberta's transmission grid and delivers electricity to approximately 85 percent of the province's population's.
For further information:
Public Relations Manager, Global Corporate
SNC-Lavalin Group Inc.
514-393-8000, ext. 54772
Vice-President, Investor Relations
SNC-Lavalin Group Inc.
514-393-8000, ext. 57553