TORONTO (Reuters) - SNC-Lavalin Group Inc (SNC.TO) is optimistic about making new construction and engineering acquisitions after selling its AltaLink asset to Berkshire Hathaway Inc (BRKa.N) for C$3.2 billion ($2.92 billion), SNC’s chief executive said on Friday.
The deal, announced late on Thursday, sent SNC shares up nearly 10 percent at one point, and speculation has turned toward what the firm may do with the cash.
Montreal-based SNC is Canada’s largest construction and engineering firm. Company officials had previously said 2014 would be a year of rebuilding and consolidation, and that acquisitions are a part of its growth strategy, but have yet to announce what the company will do with the money.
“There’s a lot of interesting opportunities ... And we’re optimistic something might happen, but we’re prepared for all options,” CEO Robert Card told Reuters in a phone interview. He declined to provide a timeline or size for any potential deal.
“You’ve noticed a lot of deals come out that our name’s not been associated with and there’s a reason for that. It’s that we didn’t see the right strategic fit.”
SNC’s greatest need is in resources, Card said, reiterating the company’s interest in oil and gas, but noted that it is also the most difficult sector to complete a deal due to the high-level of interest and activity.
The company’s president of resources, environment and water said in a March interview that an acquisition would likely be made by the end of the year.
Card also pointed to the “rich array of relationships” his leadership team brings to the company that will help its deal-making quest. SNC management includes former executives from companies like British oil and gas engineering firm Amec PLC AMEC.L.
SNC’s multi-billion dollar deal to sell Alberta-based AltaLink, the province’s largest regulated electricity transmission company serving about 85 percent of its population, impressed even the more optimistic market views.
A number of analysts raised their price targets and ratings on SNC following the deal, which also includes an arrangement with Berkshire Hathaway Energy subsidiary MidAmerican Transmission to develop engineering, procurement and construction opportunities in the United States and Canada.
Even Card said the transaction, which drew a huge amount of interest from various parties, was “clearly on the high end” of the company’s expectations.
“All of (the interested parties), if they had been announced yesterday, you would’ve said, wow, there’s a well-heeled bidder who knows what they’re doing,” he said.
SNC has other assets it has said it will eventually sell, including the 407 express toll highway that crosses just north of Toronto, Canada’s largest city. Card said selling the 407 would be a “mid-term” plan, sometime in the next few years.
Editing by Chris Reese