Stantec to acquire Morrison Hershfield
Stantec, an Edmonton-headquartered design and engineering consultancy, has agreed to acquire Morrison Hershfield, a Markham, ON-based civil engineering firm.
Founded in 1946, Morrison Hershfield works in transportation, buildings, and environmental services. With a strong presence in Canada, the firm has 1,150 people across offices in 22 cities in Canada and the US and one office in India.
The acquisition, which is expected to close in the first quarter of 2024, will expand Stantec’s presence in most major Canadian markets and strengthen its US presence in buildings engineering. The addition of Morrison Hershfield will increase Stantec’s Canadian headcount by approximately 10% and double its transportation sector presence in Ontario – strengthening areas such as bridge, highway, construction administration, and inspection services.
The deal is Stantec’s 14th since September 2020, growing its global workforce from 22,000 to 28,000. The firm in November 2023 announced the purchase of 645-person German infrastructure consultancy Zetcon Engineering and in June agreed to acquire 270-person American environmental consultancy Environmental Systems Design.
“We are thrilled to bring a firm of Morrison Hershfield’s stature into the Stantec fold,” said Gord Johnston, president and CEO of Stantec. “Our firms have shared a mutual admiration over many years. Stantec and Morrison Hershfield have a similar history from our roots in the Canadian market, growing and diversifying services both by geography and service line. And, importantly, our values and culture are very well aligned.”
Stantec's recent third quarter was its best-ever three-month period, with record profits of $103.9 million, revenue of $1.32 billion, and earnings per share (EPS) of $1.14. Approximately a quarter of the Edmonton firm’s revenues come from its Canadian operations, while over half comes from its US operations.
Stantec has seen its share price rise approximately 61% in the last year, reaching $106.94 at Tuesday close.
“With access to Stantec’s depth of renowned experts, resources, and cutting-edge technology, we will be able to provide our employees with exciting and meaningful work, growth, and professional development for the long term,” said Anthony Karakatsanis, president and CEO of Morrison Hershfield. “This acquisition provides us with access to many high-profile North American and global projects and markets in the communities where our employees live and work.”
Montreal-based rival WSP has also been on an aggressive acquisition path, making several major purchases in the environmental services area. The firm in 2020 announced the acquisition of Canada-based Golder (7,000 people) and in 2022 bought the environmental consulting business of UK-based John Wood Group (6,000 people) and UK-based RPS Group (5,000 people).
