Calian acquires Amtek Engineering as Q2 profits drop

Ottawa-based Calian Technologies has acquired another local company, Amtek Engineering Services.

The move comes the same day as Calian (TSX:CTY) revealed its second-quarter results, reporting declines in both revenue and profits it says were triggered by government spending reductions.

Calian says the Amtek acquisition will help it expand its service offering.

“Not only will the Amtek acquisition provide an appropriate return on our investment, it will certainly put Calian in a stronger position when the inevitable upturn in defence spending arrives,” Ray Basler, the company’s president and CEO, said in a news release.

Amtek will be consolidated into Calian’s Business and Technology Services division.

“We are excited about the acquisition of a quality organization such as Amtek. We have worked closely with Amtek on a number of occasions and I believe they will be an excellent cultural fit with our division,” Kevin Ford, president of Calian's BTS division, said in a release.

Amtek has frequently acted as a subcontractor to Calian on contracts for the Department of National Defence.

According to government records, so far this year Amtek has received five contracts from the feds worth more than $1.8 million (not including where it was a subcontractor). In 2013, it was the primary contractor on 14 federal contracts worth a total of $3.5 million.

Calian reported revenue of $51.2 million during the three-month period that ended March 31, 2014. That’s down 13 per cent from $58.9 million during the same period last year.

That pushed the company’s net income down from $3.4 million to $2.4 million.

"The results released today were disappointing relative to the prior year. Contraction in government spending has definitely taken its toll on both of our divisions,” Mr. Basler said.

The company says projects were delayed or cancelled and increased competition for limited government contract dollars also had an impact.

Calian says its health-care business did see some growth and that it has secured some new contracts which will improve its performance in the second half of the year.