Stantec has entered into a merger agreement to acquire MWH Global, a Broomfield CO-based global engineering, consulting and construction management firm focused on water and natural resources for built infrastructure and the environment.

The acquisition is expected to be financed with a combination of the proceeds of an equity financing and new credit facilities as follows:

• C$525 million ($407 million) public offering of subscription receipts on a bought deal basis at an offer price of C$30.25 ($23) per subscription receipt for a total of 17 million subscription receipts and up to an additional approximately C$79 million ($61 million) in gross proceeds pursuant to an underwriter over-allotment option
• C$800 million ($614 million) senior secured revolving credit facility, of which approximately C$233 million ($189 million) will be drawn
• C$450 million ($345 million) senior secured amortizing non-revolving term credit facility Stantec has also secured a C$525 million ($403.49 million) bridge facility which could be used in conjunction with the revolving facility and the term facility to fund the acquisition in the event the equity financing is not completed on or before the acquisition closing date. The bridge facility will be terminated in the event the equity financing closes

Canadian Imperial Bank of Commerce acted as sole lead arranger and sole bookrunner for the revolving facility, the term facility and the bridge facility.

DBO Partners acted as lead financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Stantec. CIBC Capital Markets also acted as financial advisor to Stantec. Legal advice to Stantec in connection with the financing is being provided, with respect to Canadian law, by Dentons Canada for the equity financing and Bennett Jones LLP for the new credit facilities and, with respect to U.S. law, by Paul, Weiss, Rifkind, Wharton & Garrison LLP. BofA Merrill Lynch acted as financial advisor, and Kirkland & Ellis LLP acted as legal advisor to MWH.

“MWH brings a global presence and reputation in water infrastructure that will advance Stantec’s position as a top-tier design firm within the highly attractive global water market,” says Bob Gomes, Stantec president and chief executive officer. “Together, we share a commitment to our communities and have the combined talent to support the most technically advanced clients and projects locally and around the world.”

MWH has a strong position and experience in international markets through its platform in the UK, Australia, New Zealand, South and Central America, Europe and the Middle East.