Bird Construction’s recent acquisition of Dagmar Construction signals its intent to expand the company’s expertise, especially in the transportation and rail sectors.
Integrating with Bird’s existing civil business, Dagmar’s capabilities and service offerings are expected to improve the company’s competitive position nationally and, in particular, provide better access to the Ontario market.
“It is consistent with our strategy to diversify across both geography and market segments,” said Teri McKibbon, president and CEO of Bird. “Through the combination of our businesses Bird will be positioned to deliver a robust suite of services and leverage strong cross-selling opportunities with major clients across Canada.”
McKibbon described Dagmar as a high-performing, Ontario-based civil infrastructure construction company.
With headquarters and maintenance facilities in Ajax, Ont., Dagmar has extensive experience in civil infrastructure sub-sectors including road, bridge, rail, sewer and water and commercial-institutional sites.
“We have a very diverse platform across all major markets in Canada coast to coast and obviously bringing in a specialized group like this really helps to further diversify our offerings in markets where we don’t offer these services,” McKibbon said. “We intend to grow and leverage some of the specialized capabilities that they have to expand in our current markets where we have a presence. The rail side is clearly something that in major markets in Canada continues to expand.”
McKibbon said the move is a catalyst for long-term growth in the infrastructure sector.
“We are confident in the opportunities this transaction creates for our employees and our clients. We expect long-term value creation for all of our stakeholders,” he said.
“When you trade publicly you try and build resiliency into your earnings and your business. We feel the move in a high growth market is a good move for us. They’ve got considerable rail experience. We’re seeing some very strong potential growth in this area, some of that is spurred by government infrastructure, some of it is spurred by the changing demographics where people live and the effect that has on how Canadians commute to work.”
The companies are aligned in many ways, said McKibbon, pointing out Dagmar has been in business for 80 years and Bird celebrated it’s 100th anniversary last year. They also have similar company values, culture and a focus on safety.
“It’s really nice fit,” he noted. “It’s been in the works for a while. We typically focus on companies that we feel we have a really good cultural alignment with. It’s really what you inspire in business to find, these nuggets you can acquire that fit nicely into your existing organization.”
The transaction closed on Aug. 31 and was effective Sept. 1. The purchase price was $32 million, before any adjustments for working capital, and Bird intends to finance 80 per cent of the transaction through debt with balance coming from Bird treasury shares issued to the seven principal vendor shareholders, a release indicates.
“We’re retaining everyone. Everyone is staying,” said McKibbon. “There were seven principals that lead the business. They are all part of our team now and are working collaboratively with our staff.”
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