SNC-Lavalin Finalizes Transfer of InPower BC

SNC-Lavalin Group (TSE: SNC), one of the world’s largest engineering and construction groups, announced Monday that it has completed the transfer of a sixth public-private partnership (P3) asset, the InPower BC General Partnership, to SNC-Lavalin Infrastructure Partners LP.

The transaction represents a total cash consideration of approximately C$41 million for SNC-Lavalin.

The InPower BC General Partnership is the entity that built and maintains the new John Hart Generating Station in British Columbia.

SNC-Lavalin’s Operations and Maintenance division will continue to provide maintenance services to the facilities for the next 11 years.

SNC-Lavalin holds a 20% interest in InPower BC, which was launched in 2017. The initial closing of the first four assets took place on September 27, 2017, and the transfer of a fifth asset was completed on June 28, 2018.

Management Commentary

“The transfer is another great example of the success of the Partnership as it creates significant value for SNC-Lavalin and enables us to continue to efficiently redeploy capital back into new development opportunities,” said Stéphanie Vaillancourt, president, Capital and Operations & Maintenance, SNC-Lavalin.

Wall Street’s Take

Last month, RBC Capital analyst Sabahat Khan kept a Buy rating on SNC and set a price target of C$42. This implies 41.9% upside potential.

Overall, the consensus among Wall Street analysts is that SNC is a Strong Buy based on three Buys.

The average SNC-Lavalin price target of C$44.33 implies upside potential of 49.8% from current levels.

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