Global design firm Stantec on Oct. 19 announced it has signed an agreement for the sale of its construction division, MWH Constructors, to funds managed by Oaktree Capital Management, L.P (“Oaktree”). The sale of MWH Constructors is inclusive of MWH Constructors’ U.K. and U.S. divisions and Slayden Constructors Inc. MWH Constructors joined Stantec through the MWH acquisition in 2016. Subject to customary conditions, the sale is anticipated to close in the fourth quarter of 2018.
The divestiture concludes the strategic review of construction services Stantec announced in April 2018. The strategic review set out to determine an option that would optimize the value of MWH Constructors and provide the best prospects for employees, clients, and shareholders.
“MWH Constructors has growth opportunities in the United Kingdom and the United States, and we believe this divestiture will better allow them to invest in and pursue growth while continuing to serve their clients,” says Gord Johnston, Stantec president and chief executive officer.
“We are excited to join Oaktree’s construction portfolio focused on project delivery,” says Blair Lavoie, president of MWH Constructors and chief of global operations. “This is a positive step in the evolution of our company, and we look forward to having a partner like Oaktree with strong financial resources and a desire to invest in our future as we continue to be the leading global project delivery company in the water sector. In the U.S., we will stay with our great brands of Slayden and MWH Constructors, and in the U.K., we will return to MWH Treatment.”
MWH Constructors provides a full range of high-value design, start-to-finish preconstruction, construction, construction management, and start-up and commissioning services, primarily for the water and wastewater markets in the United States and the United Kingdom. MWH Constructors ranks No. 1 with Engineering News-Record as Top International Contractors for wastewater treatment and No. 3 for sewer and solid waste.
With the pending divestiture of MWH Constructors and the 2017 divestiture of Innovyze, Stantec will continue to focus on its core consulting services business globally. Stantec has announced eight strategic acquisitions so far in 2018 and is, for the second consecutive year, ranked No.10 on the Engineering News-Record Top 150 Global Design Firms list.
Perella Weinberg Partners L.P. served as exclusive financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Stantec on the transaction.