(Bloomberg) — French construction and engineering firm Egis SA aims to spend around $800 million on acquisitions in the US and Canada as part of its plan to reach about $1.1 billion in sales there by 2028, according to its chief executive officer.
The firm, which is partly owned by alternative asset manager Tikehau Capital SCA, currently makes about $200 million in revenue in the US and Canada, CEO Laurent Germain said Tuesday in an interview from an industry conference in Arizona where he plans to “initiate talks for future acquisitions.”
“We’ll have to make many supplementary acquisitions both in Canada and the US,” following recent purchases of Toronto-based firms McIntosh Perry and SvN Architects + Planners, Germain said. “We currently have other M&A projects which are under finalization or discussion.”
The US construction industry is reaping benefits from the Infrastructure Investment and Jobs Act that provides $550 billion for improving roads and bridges as well as for carbon-saving measures like clean energy, mass transit and electric vehicle. The Inflation Reduction Act, which supports energy projects with tax credits is also a boost.
“North America is the market that will grow most in terms of infrastructure spending over the next five years, alongside the Middle East,” where Egis already has a “critical mass,” Germain said.
The company, which has helped build everything from nuclear plants in France to public transport systems in Australia, will seek acquisitions in engineering services for urban light rail projects as it wants to participate in the renovation of the New York subway and extension of metro and tram lines in other large US cities and in Canada.
It will also target acquisitions in nuclear and power-grid engineering to benefit from growth in electricity demand, the Egis boss said. Its search will focus on Texas, Georgia, Florida, as well as North and South Carolina.
The company has almost doubled its revenue since 2020 to €1.9 billion ($2 billion) last year thanks to an average organic growth of 12% per year and 35 acquisitions across the world, Germain said. Besides North America, Egis will also spend about €250 million on acquisitions in countries such as the UK, Australia and France to a smaller extent, as it aims for €4 billion in revenue by 2028, the CEO said.
Tikehau owns 40% of the company and state-owned Caisse des Depots & Consignations has 34% stake. The rest is held by the management and employees. To help fund growth, Egis plans to proceed with a capital increase next year, the CEO said. However, the shareholding balance should remain little changed, he added.
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