Following the $1-billion acquisition of water engineering giant MWH Global, Stantec Inc. (TSE:STN, Mkt cap 3.09B, P/E 19.90, Div/yield 0.11/1.37, EPS 1.65, Shares 93.88M) plans to seek out deal opportunities outside of North America, the Financial Post reports.
Stantec president and CEO Bob Gomes explained how the purchase of MWH Global gives the firm some leverage in additional overseas markets, and it plans to make full use of it.
The deal with MWH is expected to close sometime in May, which will see Stantec grow the proportion of its business it conducts outside of North America to 30%, from 3% currently.
Last week, the Edmonton-based firm confirmed the closing of its previously announced $604 million bought deal, which Gomes says gives it the flexibility to pursue additional deals in international markets, as well as fund the deal for MWH.
“We did that on the anticipation that we can go out with our integration strategy right away,” Gomes said of the financing, which priced Stantec shares at $30.25 each.
Gomes said the company is keeping its ear to the ground for similar “bolt-on” acquisitions in Australia, New Zealand, the United Kingdom and South America, swelling MWH’s presence in the respective regions.
The strategy is in keeping with Stantec’s existing approach to growth – it closes many small acquisitions every year within North America – adapting it to markets where MWH has a presence.
The MWH deal also prevents Stantec from becoming overly dependent on revenues from the oil and gas industry, as some analysts have noted.
Edmonton based Stantec provides planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. Stantec has 3 business operating units: Buildings, Energy & Resources, and Infrastructure. The Company’s Buildings business operating unit consists of services in architecture, buildings engineering, project management, interior design, and functional planning for vertical infrastructure. The Energy & Resources business operating unit is composed of environmental services, industrial engineering services, project management, and construction management services, primarily for private sector clients. Its Infrastructure business operating unit is engaged in the design and engineering services, and also project and construction management. More from Reuters »
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