SNC-Lavalin completes sale of 10.01% stake in 407 International Inc. for C$3.25B

Date Closed

August 07, 2019

Lead Office

Toronto

Value

3.25 Billion CAD

On August 15, 2019 SNC-Lavalin announced it has completed its previously announced sale of a 10.01% stake in 407 International Inc. to a subsidiary of the Canadian Pension Plan investment Board (CPPIB).

In early April, SNC-Lavalin was initially set to sell the 10.01% stake in the toll road to the Ontario Municipal Employees Retirement System pension fund (OMERS). However, in May CPPIB, which already owns a 40% stake in Highway 407, exercised its right of first refusal.

On closing, SNC-Lavalin received the base purchase price proceeds of $3.0 billion, with up to an additional $250 million contingently payable over a period of 10 years, conditional on the attainment of certain financial thresholds related to the ongoing performance of Highway 407 ETR. SNC-Lavalin intends to use net proceeds from the acquisition to pay approximately C$600 million under a loan agreement with Caisse de dépôt et placement du Québec, and to execute its deleveraging plans.

OMERS Infrastructure manages global assets in infrastructure on behalf of OMERS. Based in Toronto, it invests in large-scale assets in sectors such as energy, transportation and government-regulated services.

SNC-Lavalin is a global project management company headquartered in Montreal. It provides project solutions such as capital investment, consulting, design, engineering and construction to clients in the oil and gas, mining, infrastructure and power industries.

McCarthy Tétrault LLP advised OMERS with a team led by David Lever and Matthew Cumming that included Jake Irwin, Paulina Bogdanova, Claire Lehan and Dilara Alpli (M&A), Gordon Baird and D.J. Lynde (Financial Services), Jim Janetos (Projects), Douglas Cannon, Stefanie Morand and Justin Shoemaker (Tax), Gregory Winfield (Pensions), Geoff Hall (Litigation), James Kelsall (Real Property & Planning) and Vincent Yip, Daniel Glover and Benjamin Lai (Intellectual Property).

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