TSX-listed SNC-Lavalin has moved to buy global oil and gas services company Kentz Corporation for C$2.1-billion, or C$17.13 a share.

The deal, which represented a 33% premium on the volume weighted average price of Kentz shares over the past 30 days, would boost SNC-Lavalin’s ambition of becoming a leading global engineering and construction player in the oil and gas sector, with a greater presence in key growth regions, including the Middle East, North America, Asia Pacific and Australia.

The acquisition would see SNC-Lavalin merge its oil and gas division into Kentz’s 14 500-employee operation under the leadership of Kentz CEO Christian Brown.

Brown would report to SNC-Lavalin president of resources, environment and water Neil Bruce.

The acquisition was aligned with the strategic priority of “balancing the company's risk profile” by significantly raising the percentage of revenues it derives from service contracts from 34% to about 40%, SNC-Lavalin president and CEO Robert Card explained.

Further, the buy-out significantly increased SNC-Lavalin's exposure in the higher margin oil and gas sector and was expected to raise the percentage of its yearly revenue derived from oil and gas services from 7% to about 24%.

"We are excited by the prospect of merging the excellent capabilities of our two oil and gas teams under the leadership of Brown, which will create a world-class team inside of SNC-Lavalin to better serve our combined clients worldwide,” he said.

The acquisition would be financed by an asset sale bridge loan of C$2.55-billion, and a term loan of C$200-million.

The transaction remained subject to conditions precedent, including the approval of the scheme of arrangement by Kentz shareholders and the receipt of applicable regulatory approvals.

The deal was expected to be concluded by the third quarter of this year.