An Ottawa-based consulting firm that helps clients around the world get complex infrastructure projects off the ground says it is joining forces with a British company in a bid to gain a stronger foothold in Europe.
CPCS announced this week it has merged with London-based FCP, an advisory firm specializing in rail transportation projects, in an agreement that was finalized on Dec. 31. Financial terms of the share-based deal were not disclosed.
The U.K. company’s major customers include Ontario Crown corporation Metrolinx, which is working with FCP on multibillion-dollar plans to expand municipal transit systems in Toronto and Hamilton. It will now become a wholly owned subsidiary of CPCS, which also focuses on the transportation sector and has been involved in projects in more than 130 countries.
FCP director Michael Schabas first suggested the potential merger last summer. The agreement came together over the next few months as the two sides hammered out the details remotely.
“We had a drink over videoconference when we signed the deal,” CPCS managing partner Jean-François Arsenault says with a laugh.
Marc-André Roy, the Ottawa firm’s other managing partner, says CPCS had been eyeing ways to broaden its expertise in rail transport and was also looking to expand its European footprint as part of its five-year growth plan.
'The perfect opportunity'
It had worked with the British company on various projects in the past, and when Schabas floated his M&A proposal, Roy and Arsenault knew they’d found the ideal corporate partner.
“This was the perfect opportunity to accomplish those two goals,” Roy says.
He says the deal fell into place quickly because the two companies have very similar approaches to business.
“They were a lot like we were 15, 20 years ago,” Roy explains. “We understand where they’re at, their ambitions and growth plans.”
The merger is just the latest chapter in CPCS’s impressive growth story.
The company began in the late 1800s when the federal government partnered with Canada’s private sector to build the Canadian Pacific Railway. The success of the railway saw the creation of a consulting arm, Canadian Pacific Consulting Services.
After a management buyout in the 1980s and a merger with another Ottawa-based firm in the 1990s, CPCS no longer has any equity relationship with the railway and is now an employee-owned company. About half of its workers are shareholders in the firm.
In recent years, CPCS’s advisers have assisted India’s Ministry of Railways in planning new freight corridors, explored public-private partnership options for urban transport infrastructure in Lagos and developed a guide for U.S. transportation agencies using new data sources such as GPS to ease freight truck congestion.
Last year, the company announced a new partnership with private equity firm Stonechair Capital to help manage US$300 million worth of investments in projects in Africa.
The combined firm will have a total headcount of nearly 140 people and annual revenues of more than US$30 million. While it already has a presence on four continents, Roy sees plenty of room for more growth in the future.
“We’re realizing through these discussions that we’ve missed a lot of opportunities to do more together,” he says. “This merger really will help us unlock some of those opportunities.”