Loss-making water specialist MWH Constructors to be sold by Stantec

After just two years of ownership, Stantec has decided to divest itself from MWH Constructors, following a period of poor results. The 1,900-person engineering and construction management firm focuses on water and natural resources for the built infrastructure and the environment.

Global consultant Stantec first struck a deal to buy MWH Constructors in 2016, as part of a deal for international consulting brand MWH Global. In a release at the time, Stantec highlighted MWH Global’s 200 year history, succession of lucrative UK clients – including Anglian, Southern Water, Thames and Severn Trent and Scottish Water – and award winning pedigree as reasons for the purchase, however, the prestige of the broader company does not seem to have translated into the Constructors wing of the former entity.

Recently, this led to Stantec announcing a strategic review of its construction services last April to deliver improved prospects for employees, clients, and shareholders. It is understood that MWH Constructors was found to be making a loss, and earmarked for a swift re-sale. Now, Stantec has struck a deal to offload its loss-making MWH Constructors operation just two years after buying the business.

Investor Oaktree Capital Management is reported to be purchasing the consultancy, which ran up losses in excess of £4 million in last published accounts, despite bringing in revenues of around £185 million. The deal is expected to be finalised before the end of the year for an undisclosed fee. After the prospective sale, Stantec will still maintain a significant presence in the UK with more than 1,700 team members across the UK, including 1,000 staff who joined Stantec from MWH’s UK-based consultancy business.

Blair Lavoie, president of MWH Constructors and chief of global operations, said, “This is a positive step in the evolution of our company, and we look forward to having a partner like Oaktree with strong financial resources and a desire to invest in our future as we continue to be the leading global project delivery company in the water sector. In the US, we will stay with our great brands of Slayden and MWH Constructors, and in the UK, we will return to MWH Treatment.”

Elsewhere, Stantec has brought one of its other recently acquired properties further into its fold. Earlier in the autumn, Stantec announced the formal integration of ESI Consulting, a leading scientific environmental consulting company, into the business. The merger occurred half a year after the firm’s initial acquisition, and saw the ESI brand exit the global consulting stage.