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Stantec Stantec to acquire select Cardno businesses to grow Environmental Services and Infrastructure footprint 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 . о 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 . • • • о 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 .