Stantec's Growth Story

Robert Gomes, president and CEO of fast-growing, serial acquiring AE firm Stantec, Inc. (Edmonton, Alberta), did double duty at the MFA M&A Forum. Gomes sat calmly on a panel during one of Thursday morning's breakout sessions at the Trump International Towers in Chicago, then stood solo and delivered the luncheon keynote, "The Stantec Growth Story."

In both cases, Gomes' contribution was considerable.

The breakout session -- "The Boardroom: How M&A Changes the Game" -- was adeptly moderated by Laura Howard of MBV Law (San Francisco, CA) and also featured leadership consultant Kathryn Sprankle of Sprankle Leadership (San Francisco, CA) and Brad Strittmater, president of Olsson Associates (Lincoln, NE). In this session, Gomes offered deep insight into how his firm approaches integration and leadership transition in an acquisition.

Gomes said that the LOI (Letter of Intent) stage, for Stantec, is the first part of the integration process. "By the time we sign the LOI, all the questions should be answered," he said. "The LOI stage is to verify that our assumptions are correct. If we sign an LOI, we're almost certainly going to do the deal."

Gomes added that Stantec doesn't rely solely on financial metrics to gauge the success of an acquisition. "We measure M&A success by whether we won a project that we wouldn't have otherwise and whether the selling firm's leaders are still there after a certain point in time," he said.

In his keynote, Gomes presented a comprehensive overview of how Stantec grew from a 600-person firm known primarily in Western Canada to a North American AE giant of 12,000 in the course of his 24 years with the company.

Gomes discussed what drives a firm's decision to sell, including:

• If they're too big to be small and too small to be big.
• It's capital intensive to continue to grow.
• If they have succession planning issues.
• If they have ownership transition pressures.
• A desire to work on larger projects and with larger clients.

The right strategic acquisition can deliver these results and more for a seller, Gomes said. As a buyer, Stantec is living proof that a growth through acquisition strategy can work -- the firm has completed 78 acquisitions since 1994. Gomes added that three-quarters of the firm's growth during his tenure with the firm has come through acquisition, a percentage the company is hoping to reverse as they focus more on organic growth.

For firms looking to grow through acquisition, Gomes advises that they have good cash flow, leadership opportunities to entice the selling partners, the willingness to be flexible with the acquiring company while devising and adhering to clear objectives in the process, and a strong foundation on which to build the new combined company.

Gomes added that Stantec changes the brand of the companies it acquires more quickly than most. "The brand has to be singular, clear and focused," he said. The best way to do this, he says, is by moving as quickly as possible to the Stantec brand.