Stantec reveals construction firm sold for lower-than-expected $102.6 million
Canadian engineering-design firm Stantec Inc. says it will record a non-cash goodwill expense of $53 million and account for an $8.7-million deferred tax charge on the sale of its construction services business.
The Edmonton-based company revealed Thursday the sale announced in October and closed last week of MWH Constructors resulted in gross proceeds of $102.6 million, less transaction costs and working capital adjustments of $57 million.
That’s far less than an estimate by an RBC analyst that the sale to funds managed by Oaktree Capital Management, L.P., of Los Angeles would bring in between $250 million and $350 million.
Stantec says it will also still be responsible for closing out a remaining waste-to-energy project in the United Kingdom and will retain certain U.K. defined benefit pension funding obligations.
The construction company, which focuses mainly on water and wastewater projects in the United States and the United Kingdom, was included in Stantec’s $1-billion purchase of Colorado-based engineering, consulting and construction firm MWH Global, Inc., in 2016.
The purchase also included water software business, Innovyze, Inc., which Stantec sold for $359 million in 2017.