DBRS Comments on SNC-Lavalin’s Proposed AltaLink Investment

DBRS notes that SNC-Lavalin Group Inc. (SNC or the Company) announced today that it will acquire the remaining 23.08% of AltaLink, L.P. (AltaLink) (rated “A” and R-1 (low) by DBRS) that it does not own, pursuant to an offer received from Macquarie Essential Assets Partnership (MEAP), for $213 million. The transaction is subject to customary closing and regulatory approval, including approval from the Alberta Utilities Commission.

DBRS notes that SNC has held a significant ownership interest in AltaLink since 2002 and considers AltaLink a core investment. The Company has a strong liquidity position and can easily fund the proposed acquisition of the remaining interest in AltaLink with cash on hand. The acquisition will have minimal impact on the Company’s financial profile, which remains above average, and does not warrant a rating action.

The offer was presented on January 20, 2011, in response to a binding offer received by MEAP from a third party pursuant to a right of first refusal held by SNC to acquire MEAP’s 23.08% ownership in AltaLink.

AltaLink is Canada’s only fully independent transmission company and it owns more than half of Alberta’s transmission grid, serving 85% of its population.

Note:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Engineering and Construction Companies, which can be found on our website under Methodologies.