URS to acquire Flint Energy Services for $1.25B

[February 21, 2012]  SAN FRANCISCO (AP) -- Construction giant URS Corp. has offered $1.25 billion in cash to buy the Canadian oil and gas contractor Flint Energy Services Ltd.

URS, based in San Francisco, said Monday that the deal will significantly expand its presence in the oil and gas industry. It will add to URS' earnings this year and boost oil and gas revenue to 22 percent of URS' total annual revenue, the company said.

URS will assume about $225 million in Flint debt. The deal values Flint at $25 per share. That's a 68-percent premium over Flint's Friday closing price of $14.90.

Flint, based in Calgary, Alberta, trades on the Toronto Stock Exchange. The deal will be conducted under Canadian law and in Canadian dollars. Canadian dollars are nearly equal in value to U.S. dollars.

URS also announced its fiscal outlook for the full year 2012. It expects to earn $292 million to $300 million, or $3.95 to $4.05 per share. It expects revenue of $9.9 billion to $10.1 billion.

Analysts polled by FactSet expect earnings of $3.97 per share on revenue of $10.15 billion, on average.

The company will provide more details about its expectations when it announces its 2011 financial results next Monday.

The deal was approved unanimously by both companies' boards of directors. It is subject to the approval of Flint stakeholders and regulators, and other customary closing conditions.

Two-thirds of Flint's shareholders and option holders must approve the agreement at a special meeting scheduled for April 3. The companies expect the deal to close in the second quarter of this year.

URS is a global engineering, construction and technical service contractor for governments and companies. It services include program management, planning, design and engineering and information technology.

U.S. exchanges were closed for the President's Day holiday.

Flint Energy Services serves energy producers, especially in Alberta's oil sands. It offers production services, infrastructure construction, oilfield transportation and maintenance.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.