North American design firm Stantec Inc. (STN - Free Report) recently inked a definitive agreement to acquire Processes Unlimited International, a full-service provider of planning, engineering, design, project management and safety services, for an undisclosed amount. The collaboration will expectedly create a solid platform for professional design and consulting services with significant operating synergies to serve a broad range of industries.
Stantec provides professional consulting services in planning, engineering, architecture, interior design, surveying, landscape architecture, environmental sciences, project management and project economics. The company currently has more than 5,000 employees across 125 offices in the U.S. Practitioners from Processes Unlimited will join Stantec's U.S. Industrial practice area unit. Stantec anticipates the transaction to close in Mar 2014.
Headquartered in Bakersfield, California, Processes Unlimited is a 450-person multidisciplinary engineering, project management and design firm founded in 1985. It has seven offices across California, Texas, Georgia and Tennessee. Processes Unlimited operates in a variety of markets such as oil and gas, alternative energies, power, utilities, chemicals, food and beverage, packaging, plastics, cement, minerals, mining, and building products.
The company focuses on innovative, customized technical services to ensure efficient project execution and coordination. In its 30-year history, the firm has amassed a sizeable portfolio of design projects spread across the domestic as well as international frontiers.
With the acquisition, Stantec will be able to extend its services in the oil and gas and industrial service verticals and capitalize on Processes Unlimited’s strengths comprising full-service planning, engineering, design, project management and safety services. On the other hand, Stantec's market-leading position, expertise and clientele will aid the growth of Processes Unlimited.
Hence, the deal is likely to result in immense operating synergies. Moreover, the companies have a similar work culture with customer and community-centric focus, and offer innovative solutions across a diverse range of industries. Notably, Stantec's presence in communities and industries across the U.S. will facilitate Processes Unlimited to expand its areas of operation.
Stocks to Consider
We expect this acquisition to be accretive to earnings for the upcoming year. Stantec is scheduled to report its current-quarter and full year 2013 results on Feb 27, 2014. For 2014, Zacks Consensus Estimate is pegged at $3.4, reflecting an expected earnings growth rate of nearly 13%.
At present, Stantec has a Zacks Rank #3 (Hold). Some better-ranked companies in the industry include CBIZ, Inc. (CBZ - Free Report) , Accenture plc (ACN - Free Report) and Bureau Veritas SA . While CBIZ sports a Zacks Rank #1 (Strong Buy), Accenture and Bureau Veritas carry a Zacks Rank #2 (Buy) each.