Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Opus shares rise to three-month high on Canadian buy

Opus shares rise to three-month high after buying Canadian business Stewart Weir

By Tina Morrison

Sept. 4 (BusinessDesk) – Shares in Opus International Consultants rose to a three-month high after the engineering consultancy agreed to pay as much as C$90 million for engineering and environmental advisers Stewart Weir, propelling its Canadian business to its second-largest unit by revenue.

Opus shares gained 4.8 percent to $1.76 after the company said it will pay an initial C$50 million for Stewart Weir, with the potential for a further C$40 million in integration and performance-based payments over three years.

Opus, which last month posted a 13 percent decline in first-half earnings because of a weaker performance from its New Zealand unit, is looking to diversify in existing markets and expand into new markets to grow profits. The company, which began its Canadian operation in 2002, sees the purchase of Stewart Weir as enabling it to expand into pipeline, infrastructure and energy related projects.

“In addition to our entry into the oil and gas sector, the Canadian federal government has highlighted infrastructure as one of its top priorities for the future,” Opus managing director David Prentice said in the statement. “Acquiring Stewart Weir is strategically important given their market strength and growth prospects both in Canada generally and in the oil and gas sector.”

The acquisition gives Opus critical mass to compete for larger projects and establishes a presence in Alberta, Canada’s top growth region.

Established in 1912, Edmonton-based Stewart Weir had normalised earnings before interest and tax of C$9 million in the year ended Jan. 31 on revenue of C$91 million, according to Opus presentation notes.

Last month, Opus said its existing Canadian business lifted sales 6.5 percent to $11.5 million and EBIT rose 51 percent to $780,000. By contrast, the company’s New Zealand revenue was $141 million, followed by Australia at $40 million and the UK at $19 million.

The potential payment for Stewart Weir is the equivalent of between 4.8 times and 7 times historical ebitda, and will be paid for with available cash and existing debt facilities, Opus said.

The acquisition of the employee owned company will add 550 staff to the company’s Canadian unit, boosting total Canadian staff to about 700, Opus said.

Stewart Weir chief executive Brian Pearse will remain with the company as president.


© Scoop Media

Business Headlines | Sci-Tech Headlines


All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>

MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Commerce Commission: Invites Feedback On Its Initial Views Of Wellington Airport’s Pricing Decisions

The Commerce Commission is inviting feedback on its initial views, released today, about Wellington Airport’s pricing decisions for specified airport services, such as aircraft parking or airfield and passenger terminal charges, for the period 1 April 2019 to 31 March 2024... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>