URS to buy Flint Energy for C$1.25 billion

Mon Feb 20, 2012 5:01pm EST
 
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By Himank Sharma and Supantha Mukherjee

(Reuters) - U.S. engineering company URS Corp URS.N will buy Canadian oilfield services company Flint Energy Services FES.TO for C$1.25 billion (US$1.25 billion) in cash, to expand its presence in the oil and gas sector.

Under the deal unanimously approved by the two companies' boards, Flint shareholders will get C$25 a share -- a 68 percent premium over the stock's Friday close.

URS would also assume C$225 million in Flint debt as part of the transaction, the companies said in a joint statement.

San Francisco-based URS designs bridges and roads and the deal expands the company's presence in designing equipment and systems needed for extracting natural gas and oil from unconventional sources such as sand. URS' revenues from the oil and gas sector will increase to about 22 percent of total revenues following the transaction, the company said.

"Through this combination, URS will be well positioned in segments of the oil and gas industry that we expect to have attractive margins and growth rates," URS Chief Executive Martin Koffel said in a statement.

The company, which competes with Jacobs Engineering Group Inc JEC.N and Fluor Corp (FLR.N: Quote), expects the deal to add 20-30 cents a share to its full-year earnings.

URS expects 2012 revenue of $9.9 billion-$10.1 billion and a profit of $3.95-$4.05 per share on a standalone basis.

Calgary, Alberta-based Flint, which has about 10,000 employees, gets about 80 percent of its revenue from Canada and the rest from the United States.   Continued...