On pace for record revenues of more than $400 million in fiscal 2020, Ottawa’s Calian Group has added to its growing global footprint with its second acquisition of a European military training company.
Calian said Monday it’s closed a $2-million deal to buy Cadence Consultancy Ltd., a U.K.-based organization that designs and delivers training exercises for NATO.
Though Cadence’s annual revenues of about $3 million won’t dramatically alter Calian’s balance sheet, CEO Kevin Ford said the acquisition serves a broader purpose of boosting the Ottawa firm’s ongoing efforts to expand its customer base across the Atlantic – a move that started last year with its acquisition of German satellite communications company SatService and continued this summer when Calian bought Norway-based Comprehensive Training Solutions International.
“It’s going to expand our network in Europe for sure,” Ford said of Calian’s latest deal, noting that while Cadence has just five permanent full-time employees, it draws on the expertise of more than 100 training consultants. “They have some great offerings that just help us continue to solidify our learning portfolio.”
In a decade in Calian’s C-suite, Ford has consistently pushed an aggressive double-barrelled approach to growing both organically and through acquisitions. The firm has stepped up its M&A game in a big way in 2020, pulling the trigger on six deals so far this year.
'On the right track'
“We’ll just continue to try and find good opportunities at every turn,” Ford said. “I think we’re on the right track.”
Under Ford’s watch, Calian has evolved into a profit-making powerhouse that offers a diverse range of services in four main product lines – advanced technologies, including satellite components; health-care services such as clinics; training services focused on defence and emergency preparedness; and IT and cybersecurity.
A central theme in Ford’s M&A playbook has always been to spread out purchases across all four service lines, in keeping with his goal of pursuing annual revenue growth of between five and 10 per cent in each segment.
But when it comes to building the Calian brand in Europe, the veteran CEO sees a continent teeming with opportunities in the military training space. In addition to expanding the firm’s potential client base, acquiring training companies also opens up new markets for Calian’s evolving line of military training software.
“There’s a lot of independent companies there,” Ford said, calling the acquisitions of Cadence and CTS the initial phase of what could be a “potential consolidation play” for Calian to gradually gather under one umbrella all the European enterprises that provide training services to the likes of NATO and the United Nations.
“There really isn’t a big company we can buy. It’s pretty fragmented.”
Ford noted that Calian had “really good success coming out of the blocks” after acquiring CTS in July, landing several new contracts. Word quickly got around in the tight-knit industry, and before long the idea of joining the Calian fold began “resonating” with other would-be acquisition targets in the military training space, he added.
“I think we woke the industry up a bit over there with (the CTS acquisition),” Ford said.
The list of eager potential suitors included Cadence co-founders Chesney Clark and Howard Chaganis. CTS owner John Cullen, a longtime acquaintance of Clark and Chaganis, arranged an introduction to Calian brass, and the deal soon fell into place.
“It’s not easy to do acquisitions in a COVID world, but we’re managing through it,” Ford said.