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Calian shares rise as Kanata firm acquires MDA’s nuclear services business

David Sali

March 6, 2024
12:37 PM
ET

Organizations: Calian Group, MDA

People: Patrick Houston

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Calian Group’s shares ticked up Wednesday as the Kanata-based firm announced it acquired MDA’s nuclear business in a move that’s expected to bring in tens of millions of dollars in annual revenues. Calian did not reveal how much it paid MDA for its nuclear services division. Calian chief financial officer Patrick Houston told Techopia the business generates annual sales of nearly $10 million and said the purchase price was less than that. Headquartered in Brampton, MDA is a space technology company best-known for producing the Canadarm used on the International Space Station. Its nuclear services business, which has about 40 employees based mostly in the Greater Toronto Area, helps clients such as Ontario Power Generation and Bruce Power maintain and refurbish nuclear power plants with the aid of cutting-edge robotics technology. MDA’s team will be integrated into Calian’s existing nuclear business, which employs nearly 100 people following the acquisition. The additional revenues will push Calian Nuclear’s annual sales “well north of $20 million a year,” Houston said. Calian serves many of the same customers as MDA, providing services such as safety training and environmental assessments as well as power plant refurbishment and maintenance. “We got into conversations with them, and they saw a good fit to move that business over to us,” he explained. Calian shares were up $1.33 to $59 in midday trading on the Toronto Stock Exchange. The deal comes a week after the federal government announced it was investing $50 million on preliminary work for an expansion of the Bruce Power nuclear power plant on the rim of Lake Huron. The funding, which will come from a Natural Resources Canada fund that backs clean-energy projects, will help nearly double the output of Bruce Power’s existing plant. The expansion would mark Canada’s first large-scale nuclear plant construction in three decades. The news follows the Ontario government’s announcement last summer that it plans to add a third nuclear generating station to Bruce Power. Meanwhile, Houston noted that other provinces also want to expand their nuclear power capabilities. For example, Calian Nuclear is currently working with the Saskatchewan Power Corp., a provincially owned Crown corporation that provides electricity to more than 550,000 customers in the Prairie province, to assess the viability of building a small-module nuclear reactor to supply power to rural areas. “I think nuclear (power) is becoming a bigger and bigger part of Canada’s green push to decarbonize the grid,” Houston said. “I think that bodes well for more activity in that space over the next 10 or 15 years. We’re starting to build up a nice business there.” The acquisition is Calian’s second of the 2024 fiscal year, following its $74.7-million purchase of Ottawa-based IT consulting firm Decisive Group in December. The company has pledged to invest at least $100 million annually in new acquisitions over the next three years to help fuel its drive to reach $1 billion in annual revenue by fiscal 2026. “We’ve got the money to do that, so now it’s really going and finding the targets,” Houston said. “We feel we’re on pace here in year one to certainly meet or exceed that $100-million target. We’re feeling optimistic about the pipeline.”