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Stantec Inc T.STN

Alternate Symbol(s):  STN

Stantec Inc. is a provider of comprehensive professional services in the area of infrastructure and facilities for clients in the public and private sectors. The Company’s segments are Canada, United States, and Global. The segments provide professional consulting in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics services in the area of infrastructure and facilities. The Company's services include engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics, from initial project concept and planning through to design, construction administration, commissioning, maintenance, decommissioning, and remediation. The Company provides its professional services throughout North America and globally.

TSX:STN - Post by User

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  • Betteryear2X
Post by Betteryear2on Oct 21, 2021 6:49am
Post# 34031250

to acquire select Cardno businesses

to acquire select Cardno businesses

EDMONTON, Alberta, Oct. 21, 2021 (GLOBE NEWSWIRE) -- Stantec (TSX, NYSE: STN), a global leader in sustainable design and engineering, today announced it has entered into share purchase agreements (the “Acquisition”) to acquire the North America and Asia Pacific engineering and consulting groups (“the Select Assets”) of Cardno Limited (“Cardno”). Under the terms of the Acquisition, Stantec will acquire the Select Assets for aggregate cash consideration of US$500 million (approximately CA$620 million) representing 9.4x the Select Assets’ 2022 expected pre-IFRS16 adjusted EBITDA post-synergies.

Strategic Highlights

  • In alignment with its strategic plan, Stantec is selectively acquiring the most strategically complementary assets of Cardno.
    • Cardno’s Latin American operations and International Development business are excluded from the Acquisition.
  • Combined Environmental Services business to represent 20% of Stantec’s pro forma net revenues.
    • Augments Stantec’s position as a leader in sustainability, growing its US Environmental Services practice by more than 60% and increasing its exposure to the $9 trillion in spending on ecosystem restoration that the United Nations forecasts by 2030.
  • Combined Infrastructure business to represent 30% of Stantec’s pro forma net revenues.
    • Bolsters Stantec’s position to benefit from global stimulus spending in key geographies.
  • Adds approximately 2,750 professionals in regions and sectors that align with Stantec’s growth objectives.
    • Nearly doubles Stantec’s Australia footprint to 2,500 employees and establishes the critical mass and diversity to further accelerate growth in this region.
    • Meaningfully increases United States footprint to 10,500 employees.
  • Complementary blue-chip clients enhance presence and growth prospects in local and federal government programs, infrastructure services, urban development, and other growing areas.
  • Expands growth platforms in government services and health sciences with significant cross-selling opportunities.
  • Strong cultural alignment with complementary vision, values, and entrepreneurial mindset.

Financial Highlights

  • Aggregate cash consideration of US$500 million (approximately CA$620 million) representing 9.4x the Select Assets’ 2022 expected pre-IFRS 16 adjusted EBITDA post-synergies.
  • Immediate double-digit accretion to adjusted earnings per share (pre-synergies).
  • 2022 expected net revenue of more than US$350 million (approximately CA$430 million).
  • US$10 million in annual cost synergies expected to be achieved within two years (approximately CA$12 million).
  • Select Assets’ 2022 expected adjusted EBITDA margin in line with Stantec’s margin profile.
  • Acquisition to be funded with existing funds and credit facilities and expected to result in an estimated 1.5x pro forma net debt to adjusted EBITDA ratio upon closing, well within Stantec’s target leverage range of 1.0x to 2.0x.
  • The acquisition is expected to close by the end of 2021.

“Stantec’s global leadership in sustainability will be further augmented by the passion and entrepreneurism of Cardno’s professionals who, like us, work at the intersection between clients, science, and innovation to solve the ever-evolving challenges confronting communities around the world,” said Gord Johnston, President and Chief Executive Officer. “We have worked closely with Cardno for many years. Cardno Group CEO, Susan Reisbord and her team have done a remarkable job in transforming their organization and returning Cardno to a strong growth path. The timing couldn’t be better to welcome their team to Stantec and grow together. Cardno’s key strengths in ecosystem restoration, health sciences, infrastructure, water, and government services are completely complementary to Stantec’s offerings in these growing sectors of the United States and Australia. Together, we will continue to set the standard for sustainable design and climate change mitigation.”

Susan Reisbord, Group CEO of Cardno added, “Joining Stantec offers a tremendous opportunity to the people of both companies to accelerate our combined growth given how complementary our strengths are in the regions we operate. Our combined Australian operations will strengthen our position as a top tier engineering and design firm there, and this will open new opportunities for us. As this process has played out, the one thing that has been striking is the commonality between our values and cultures.”

Acquisition Conditions

Completion of the Acquisition remains subject to Cardno shareholders’ voting in favor of the Acquisition, Cardno having completed a pre-sale restructure to transfer the International Development business outside of the Select Assets, all waiting periods to consummate the Acquisition under the Hart-Scott-Rodino Act having expired or been terminated, and Defense Counterintelligence and Security Agency of the U.S. Department of Defense having approved the Acquisition for the purposes of applicable foreign investment laws in the United States.

Financial and Legal Advisors

National Bank Financial Inc. is acting as sole financial advisor to Stantec on the Acquisition. Legal advice is being provided to Stantec by DLA Piper.

Webcast & Conference Call

Stantec will host a live webcast and conference call on October 21, 2021, at 7:00 AM Mountain Time (9:00 AM Eastern Time) to discuss the Acquisition. The webcast and slide presentation can be accessed at the following link:

Participants wishing to listen to the call via telephone may dial in toll-free at 1-855-639-2363 (Canada and United States) or +1-409-216-0845 (international). Please provide confirmation code 4958938 when prompted.

The conference call and slideshow presentation will be broadcast live and archived in their entirety in the Investors section of

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