Companies
Stantec To Sell Innovyze Water Tech Unit for $270 M
Global design firm Stantec has signed an agreement to sell its Innovyze software business for $270 million to the investment firm EQT Mid Market US fund, the Alberta-based parent said on March 21.
Innovyze joined Stantec in 2016 through the Canadian firm's nearly $800-million acquisition of global water services firm MWH of which the software firm was a part. The Innovyze sale is set to close in in the second quarter, Stantec said.
Founded in 1996 as the internal MWH software business, Innovyze is a global provider of wet infrastructure business modeling and analytics software for water/wastewater utilities, government agencies, and engineers and other firms.
"Joining forces with EQT will help us further enhance our technology innovation and talent pool," said Innovyze Chairman, President and CEO Paul F. Boulos.
EQT Mid Market US said it aims to help the firm develop new products and expand into new geographies. "Innovyze has successfully differentiated itself through best-in-class software capabilities," said Matthew Levine, an advisor to the buyer. "We are very excited about the future growth of the global water infrastructure market and Innovyze's position at the forefront."
Maxim Sytchev, managing director and AEC sector analyst for Toronto-based National Bank Financial, said Innovyze is consolidated within Stantec's consulting services water unit but managed separately, with 60% of the software firm's customer base made up of its parent's competitors.
"The sale of Innovyze—an asset that management deems non-core [and] we agree with this assessment—brings material proceeds, especially for something that was under the radar," he said. "This is a very positive development in our view."
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Stantec President and CEO Bob Gomes said the integration of MWH and Stantec North American operations also is set to finish in the second quarter, with merging of "successive parts" within the next 18 months.
"We see this as an opportunity to continue working with them in servicing our clients while allowing both our companies to prosper with the best available resources," he added.
