Calian buys Ottawa-based ISR, gaining presence in Dubai and Netherlands

Second-quarter profit rises to $4.2M
Nuclear

In a bid to boost its international presence and bolster its service offerings, Ottawa-based Calian Group (TSX:CGY) has purchased a local emergency management firm with offices in Europe and the United Arab Emirates.

International Safety Research, which was founded in 1998 and is headquartered on Colonnade Road, specializes in emergency preparedness and response services and has expertise in radiation and nuclear safety engineering.

According to Calian, ISR has $8 million in annual revenues and will bring its new owners additional services and tools for emergency response exercises, particularly in the nuclear sector, Calian CEO Kevin Ford told investors during a call to discuss the company’s second-quarter earnings.

“(With) an increase in natural disasters and terrorism, the reality is that emergency response preparedness is becoming an increasing requirement” for governments and organizations, Mr. Ford said.

He also said ISR’s presence in Dubai and the Netherlands provides Calian with an opportunity for further international growth. Mr. Ford said the acquisition gives Calian “a launch point” to take its training, engineering and emergency preparedness services to “a global level.”

Calian is a highly diversified company that provides a range of business and technology offerings, including health, training, IT and engineering services, out of its Ottawa headquarters. Its Saskatoon-based systems engineering division supplies communications systems for space agencies and satellite firms as well as contract manufacturing services.

Calian did not disclose how much it paid for ISR beyond that it was about five times ISR’s earnings before interest, taxes and amortization. The acquisition closed Tuesday, Calian said.

When asked by an investor about the future of ISR chief executive Michael McCall, Mr. Ford said Calian’s plan is to “retain the ownership group” and praised the expertise of the company’s nuclear engineers.

The acquisition of ISR was disclosed as Calian reported a second-quarter profit of $4.2 million, an increase of 28 per cent over the $3.3-million profit it posted a year earlier. The company said the higher profit was due in part to more higher-margin jobs in its current mix of projects.

Revenues in the second quarter, which ended March 31, were down two per cent to $67.1 million. The company said this is primarily due to the timing of several new projects and noted that revenues during the first six months of the company’s fiscal year are up two per cent over the same period last year.

Calian’s shares were largely unchanged, ending the day down four cents, or 0.14 per cent, to $27.76.