Friday, September 19, 2008

More on the Cardno-TBE deal

Just wanted to make a quick point that the acquisition of TBE Group by Australian-based Cardno Limited (the press release called it a merger, but let's call a spade a spade here) is a continuation of Cardno's expansion into the United States.

I had lunch with Cardno USA President Michael Renshaw last year at a conference on (surprise, surprise) mergers and acquisitions. He told me that he likes to look for US-based firms that can add to his company's profile.

I found him to be very engaging and personable, chatting up others at the table with a smoothness and ease that made it very easy for me to see how successful he's been at acquiring and integrating US-based firms to his foreign profile. Reminds me a lot of Malcolm Paul at WSP Group in that way. I wrote a lengthy profile on Paul about a year ago and he talked about how he liked a diverse worldwide portfolio to insulate his company from economic struggles in any one country.

Likewise, the TBE acquisition means about one-third of Cardno's 3,400 employees will work in the United States. And because TBE has seen annual growth of about 14% per year for the past 10 years, it's likely that TBE got a good price in the deal, even though the U.S. economy has not necessarily been favorable for firms working in infrastructure like TBE. Expect that to change, however, next year as it is likely that priorities will shift toward fixing America's infrastructure with the new presidency, regardless of whom wins the November election. This will only improve Cardno's ability to generate a healthy return on its investment.


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