Irish-founded engineering company Kentech is buying Canada-based SNC-Lavalin's oil and gas division, boosting its sales to $1 billion (€820 million) and reuniting parts of the old MF Kent group.
SNC Lavalin put its oil and gas business up for sale to allow it focus on engineering services after the Toronto-listed group sustained heavy losses.
Kentech Corporate Holdings confirmed that it was buying the division. Chief executive John Gilley said the deal would boost the company's turnover to $1 billion a year from about $300 million.
“Our ambition was to get to $1 billion turnover by 2025 but we are now going to achieve that three years early,” he said.
Neither party has revealed the price.
The transaction will increase Kentech’s workforce to more than 10,000 from its current 3,500. The combined Kentech-SNC-Lavalin business will have a backlog of contracts valued at $1.1 billion.
Kentech's deal will reunite elements of what was MF Kent, the global engineering group once headquartered in Clonmel, Co Tipperary.
SNC Lavalin’s oil and gas division is mainly made up of the former London-listed Kentz, founded through a management buyout of MF Kent in the late 1980s. The Canadian company bought this in 2014.
After the management buyout, Frank Kent, who had been owner of MF Kent, went on to found Kentech. Mr Gilley said this group still has a number of Irish-registered companies, but is now based in Dubai.
Opportunities
Its main Irish business, Dornan Engineering, was bought out by its management in 2010. Mr Gilley noted that there were few opportunities in oil and gas in the Republic.
He explained that the SNC-Lavalin transaction would give Kentech a foothold in engineering consultancy and give it expertise in emerging industries, including renewable energy, carbon capture, hydrogen and biofuels.
Kentech is focused on the oil and gas and energy businesses, working on power plants, offshore rigs and other such plants for its clients. It has three divisions: design and build; commissioning and start-up; and maintenance.
The deal announced this week will add consultancy as a fourth strand to that. It will also expand its presence globally.
Kentech will have businesses in the United States, Canada and South America, Europe, the Middle East and Asia-Pacific.
The group's clients include Abu Dhabi National Oil Company, BP, Chevron, Exxon Mobil, Qatar Petroleum, Saudi Aramco and Shell.
In a statement, Mr Gilley said Kentech was positioning itself “as a leading energy services firm to take advantage of the next cycle of growth in the sector”.
SNC-Lavalin said it would class the oil and gas division as an asset held for sale in its fourth-quarter results.
