For Bird president and CEO Teri McKibbon the acquisition of Jacob Bros addressed expansion needs for both companies while meshing a similar corporate culture.
Bird Construction announced on June 10 it is acquiring Surrey, B.C.-based Jacob Bros for $135 million.
The Jacob Bros acquisition was a continuation of similar efforts in Eastern Canada such as purchasing Dagmar Construction as well as H.J. O’Connell in Quebec, McKibbon said.
“We started to assemble an entity that was similar in size to Jacob Bros in organization and we like the market, the performance, the demands (with) projects that were more sophisticated. We had nothing like that in the west other than a civil-industrial focus on large industrial projects,” he said.
“This opportunity started to develop and it just fit like a glove in terms of what we’re doing in the east, only this is Canada’s second largest market for infrastructure construction and second largest city for that type of work.”
He said while Jacob Bros had been growing, they could see the benefits of being part of a larger organization that could bring the company scale.
“They also felt that with Bird’s plethora of service operations, it would be beneficial and our size and strong balance sheet supports the next level of growth,” McKibbon said. “The kind of things Bird was already doing in the B.C. marketplace, they just felt that fit really well with what they were doing and there wasn’t really any overlap.”
Jacob Bros CEO Scott Jacob said the main reason for selling the company was to ensure it would continue beyond his and brother Todd Jacob’s eventual retirement.
“Our number one driver is that it gives us certainty beyond the end of my productive life as the leader of the company and that of my brother,” Jacob said.
“It’s really succession planning. We’ve been working toward a 2030 plan where we’re at the helm and we’re building a management team, but it’s a big machine and having a parent, if you will, that has deep pockets and understands us gives us certainty and gives our staff certainty, letting our young guys plan well beyond my career and Todd’s,” he added.
Scott Jacob will stay on as CEO and Todd Jacob as COO. They will continue to run the business as its own entity, he added, “but they’re also going to be our representatives for infrastructure.
“For us, that’s all the horizontal, heavy civil, transportation…They’re going to run that for our western Canadian business. In eastern Canada we have a similar setup and structure and we have executives that lead the local business and then executives who lead major projects,” he said.
“These guys brought the whole package. They’d worked in Alberta previously, so they have the experience there (along with) a large platform in B.C. so it fit together really nicely,” McKibbon said. “It was a void as we were expanding outward to build this full vertical of infrastructure and it’s a really nice fit to build out that piece in one transaction.”
Jacob said the arrangement allows for greater depth in chasing bigger projects.
“We’re an infrastructure builder, we do about $250 million a year, and we were beginning to bump into the limit of our ability as individuals to backstop the large projects.
“It gives us a lot more depth and access to resources,” he added. “We see it as complementary…Our deal was to keep us doing what we’re doing, just with some bench strength behind us.”
McKibbon added in terms of culture both firms are highly respected by the construction industry with a heavy focus on people and culture.
“We have a very strong sense of how critical people are in our business and so do they. Going through this process, I really gained a lot of respect for how focused they are on their teams and that was a really nice alignment for us,” he said.
He listed Jacob Bros focus on leadership development, a people-first culture, humility and a “very high-performing organization.”
McKibbon said growth can be achieved organically or accelerated by buying a company, but it comes down to addressing “a strategic need we’re trying to achieve.”
“With Jacob Bros we were working with them on other projects and our district lead in B.C. Mike Bebbington had a close relationship and suggested they might be a nice fit based on his experience with them over many years and from there it evolved,” he said.
“I’ve done a lot of these over my career and they take a while to gel, sometimes they go a little faster and sometimes they take a little longer. The last six months or so it was a concerted effort by Jacob Bros to make this work.”
Finally, an acquisition of this type relies on chemistry, he noted.
“You have to assemble teams of lawyers and bankers to support you and we had a great team but it starts with a chemistry at a very senior level. We developed really good chemistry right out of the gate,” McKibbon said.
“I was absolutely shocked at how aligned the Bird culture and Jacob Bros culture were,” Jacob said. “This was not ‘Let’s put it on the market and sell to the highest bidder.’ This was what’s a good fit for Scott and Todd, for our people and what’s a good fit for the eventual buyer and the alignment on culture was a huge piece of how this came to be.”
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