Egis, a French engineering, construction and consulting firm focused on sustainable infrastructure and mobility services, plans to deploy USD 100m on M&A through 2024 in the US and Canada, said CEO Laurent Germain.
Paris-based Egis, which made 12 acquisitions in 2021 and eight in 2022, expects North America to account for about 80% of its global M&A activity over the next two years, the executive told this news service. He would expect to acquire two or three more North American firms in 2023 and three or four next year, he said, adding that the sweet spot for targets is revenue of USD 10m-USD 50m. Egis is projecting 2023 global revenue of close to USD 2bn, of which North America is expected to account for 10% of the total. France is the single largest market, accounting for roughly 35% of revenue.
Woodbridge, Ontario-based McIntosh Perry Consulting Engineers, which Egis has agreed to buy for undisclosed terms from financial sponsor Signal Hill Equity Partners, will serve as the North American platform for additional buys, Germain said. The Canadian company, which he said for this report has revenue of USD 120m, 800 employees and 21 offices, was marketed through a competitive bidding process that attracted financial and strategic bidders, he said. McIntosh Perry subsidiary Beam, Longest & Neff, based in Indianapolis, Indiana, is part of the transaction, the sixth acquisition of 2023 for Egis. It is expected to close in early July.
The US states of Florida and Texas, and the Canadian provinces of British Columbia, Ontario and Quebec, are of particular interest for acquisitions, the CEO said. Ideal targets in both countries will be involved in engineering, consulting and design for rail and transit projects, climate change mitigation and sustainability projects.
Egis hears from undisclosed investment banks but is open to additional pitches, he said, adding that McIntosh Perry has its own M&A pipeline.
Acquisitions will also be sought in the UK and France, Germain said, with transportation, environmental and nuclear projects a focus in the UK, and energy transition projects including nuclear and offshore wind of interest in France.
Formerly state-owned, Egis shareholders consist of Tikehau Capital (40%) via its T2 Energy Transition fund, Caisse des Dépôts (34%) and its management and employees (26%), according to its website. France-based Tikehau acquired its stake in January 2022 from Caisse, a French public sector financial institution. For this report, the CEO said he would expect Tikehau’s investment horizon to be in the typical five-year range.
Germain, who joined as CEO three years ago “to privatize the company and speed up its growth rate,” said he first met McIntosh Perry CEO Gus Sarrouh several years ago and kept in touch until its sponsor was ready to exit. Price was a key consideration in the sale, but also that “we were able to convince McIntosh Perry that we had a vision of growth for them as a platform, and it was very appealing to management.”
Egis has a goal to become one of the 10 largest engineering companies worldwide by 2026, which could be achieved at approximately USD 3bn in revenue, he said.