Calian Group grabs foothold in ‘NATO markets’ with European acquisition

Kevin Ford
Kevin Ford

The COVID-19 pandemic hasn’t done much to quell Calian Group’s relentless drive to grow through acquisitions.

The Kanata firm said Tuesday it’s officially pulled the trigger on a deal to buy Comprehensive Training Solutions International, a small company based in Norway that provides crisis management and emergency response training. Terms of the deal were not released.

It’s Calian’s third acquisition already in 2020 and 11th in the past nine years. Although the European firm’s annual revenues of about $4 million represent roughly what its new owners generate in one week, Calian CEO Kevin Ford said the deal gives his firm something far more valuable than mere numbers on a balance sheet.

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One of CTS’s marquee customers is the Norway-based Joint Warfare Centre, a multinational military organization that’s part of NATO. As Calian looks to build its global defence training business, Ford said getting instant access to a client of that stature is a gigantic step forward and could accelerate the firm’s European growth trajectory. 

Presence in Europe

“I think this is an opportunity for us as a Canadian company to get access to some of the NATO markets,” the veteran executive said. “To (gain) a presence in Europe, get NATO exposure, win contracts with NATO, that can take years. This makes a lot of sense for us in the growth of our learning business.

“We’re pretty excited about that. It doesn’t sound like a lot of money in the context of our revenues, but strategically it’s a very, very good move for us as a company.”

Ford said he first started talking with CTS owner John Cullen, a former member of the Canadian military, nearly two years ago about working with the Scandinavian company on training projects. As the two got to know each other and their businesses better, they decided to join forces.

“Through those discussions, we just recognized, it probably makes sense if we were actually part of the same team,” Ford said, adding the deal is a good fit for both sides.

“The challenge for a lot of smaller companies is to get bigger opportunities, you’re just not big enough to go after them. Now (CTS is part of) a multimillion-dollar, Canadian-based, publicly traded company that has got a great track record. I think we’re looking forward to seeing what we can do together.”

In a statement, Cullen said he’s excited to become part of Calian’s executive team. 

“Together we will have an opportunity to continue our important training delivery for NATO while expanding business in Europe,” Cullen said.

The deal comes 15 months after Calian paid about $10 million for German satellite communications company SatService, the firm’s first European acquisition. In January, Calian continued to push its aggressive M&A strategy, buying Ottawa-based Allphase Clinical Research Services and Alio Health Services in a cash-and-share deal worth about $14.5 million.

Now at nearly 3,500 employees, Calian is on pace for revenues in the $400-million range in fiscal 2020 and has recorded 74 consecutive profitable quarters. Ford said Tuesday the latest acquisition is “all about trying to be that double-digit growth company,” referring to his goal of raising the firm’s overall revenues by at least 10 per cent a year.

Calian’s shares were up about three per cent to $59.90 in late afternoon trading on the Toronto Stock Exchange. 

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