EDMONTON — Shares in Stantec Inc. gained more than 10 per cent Thursday after the company announced a deal to buy Cardno Ltd.'s North American and Asia Pacific engineering and consulting business for US$500 million.
The Edmonton-based company said Thursday the deal helps expand its environmental services business.
Stantec shares were up C$7.43 at C$69.38 in mid-morning trading on the Toronto Stock Exchange.
The acquisition will add about 2,750 professionals to Stantec, nearly doubling its position in Australia to 2,500 employees and increasing its presence in the United States.
Cardno’s Latin American operations and international development business are not included in the deal.
Stantec CEO Gord Johnston said the company has worked closely with Cardno for many years and credited Cardno Group CEO Susan Reisbord and her team with transforming the company and returning it to a strong growth path.
"The timing couldn’t be better to welcome their team to Stantec and grow together," Johnston said in a statement.
"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."
RBC analyst Sabahat Khan said in a note to clients that the acquisition gives Stantec exposure to the right markets and regions.
"The increased exposure to environmental and infrastructure spaces also positions the business well amidst the broader industry tailwinds which include sustainability driven demand and increased infrastructure spend globally," Khan said.
This report by The Canadian Press was first published Oct. 21, 2021.
Companies in this story: (TSX:STN)
The Canadian Press