Still Shopping, Stantec adds MWH Global

• Via $795-million deal, Stantec now adds 187 offices in 26 countries worldwide;
• Acquisition affords MWH Global access to much-needed capital, other resources;
• Stantec’s 115th acquisition now greatly strengthens its expertise in water markets.

by JOHN GREGERSON | April 6, 2016

Just weeks after Canadian multi-disciplinary giant Stantec announced plans to extend its U.S. presence by acquiring Chicago’s 280-person design firm VOA Associates Inc., the Edmonton, Alberta-based firm now has made a much grander U.S. play. On March 29, Stantec said it will “merge” with multinational water resources engineer MWH Global Inc., Broomfield, CO.

Shake on it: Stantec’s Gomes (l) and MWH’s Krause.

The $795-million deal, the largest in Stantec’s 62-year history, will add 6,800 employees to the firm’s current roster of 15,000. Tracing its own roots back to 1945, MWH today operates 187 offices in 26 countries. In 2015, it reported $1.32 billion in gross revenues, compared to Stantec’s $2.2 billion. Said Stantec President and CEO Bob Gomes, “MWH brings a global presence and reputation in water infrastructure that will advance (our) position as a top-tier design firm within the highly attractive global water market.”

Citing the two firms’ “highly complementary cultures, MWH chairman and CEO Alan Krause added, “[The] transaction… will enable us to thrive and grow amidst an increasingly complex industry landscape by strengthening our combined ability to solve the most pressing water, transportation and infrastructure challenges.”

In a detailed online presentation, Stantec says it now becomes “a global leader in water resources infrastructure” with a much greater presence in Europe, Australia, New Zealand, Central and South America, and the Middle East. To date, the vast majority of the firm’s revenues have derived from North American markets, where most of its 250 offices are located.

• Sample projects: Below, a recent MWH Global video on hydropower generation.

“We’re very excited and relieved to have this past us,” said MWH Global CFO David Barnes, speaking with reporters last week. He elaborated that his firm had spent significant amounts of time evaluating its capital structure and ability to grow as an employee-owned firm, concluding that merging with a larger, publicly traded entity would give it access to much-needed capital.

To date, Stantec has now engaged in 115 acquisitions. Once its latest is complete, some 70% of its revenues will derive from outside of Canada. But Gomes was quick to note that, even though several of MWH’s top executives will continue to play leadership roles, Stantec will remain headquarted in Edmonton. “That’s the key point I want to make. Although we continue to get bigger and more global, nothing is leaving Edmonton,” he said.

The acquisition received unanimous approval by the boards of directors of both firms, but remains subject to approval by at least two-thirds of privately owned MWH shareholders. Plans also must undergo scrutiny by the Federal Trade Commission to ensure compliance with the U.S. Hart-Scott-Rodino Anti-Trust Improvements Act. Assuming all goes as planned, Stantec expects to complete the transaction by June 30.