A $1.5 billion Canadian construction company founded more than 100 years ago in Saskatchewan is expanding its reach and expertise through the acquisition of Surrey-based Jacob Bros Construction.
Last month, Bird Construction Inc. (TSX: BDT), now headquartered in Ontario, announced it will acquire Jacob Bros for $135 million.
The acquisition must be cleared by the Canadian Competition Bureau and is expected to close in the third quarter of 2024.
Headquartered in B.C.’s second-largest city, Jacob Bros is a private company owned by brothers Scott Jacob, who is CEO, and Todd Jacob, who is COO.
The company employs 350 people and specializes in heavy construction. For Bird, the acquisition gives the company a greater foothold in Western Canada.
It also positions both companies to capitalize on growing opportunities in the fields of electrification, and “green infrastructure” and transportation, Bird said in a press release.
“The combined company will have a greater platform from which it will be able to access larger-scale projects and expand career opportunities for employees,” said Bird Construction CEO Teri McKibbon.
“The acquisition will enable Bird to advance our strategic focus on complex work in high-demand, higher-margin self-perform sectors, which we expect will contribute to continued margin enhancement.”
“We are excited about the opportunity to leverage the synergies between Jacob Bros and Bird to service a wider range of projects and customers and to continue to grow the brand,” said Todd Jacob.
Scott Jacob said joining Bird will give his company more “financial horsepower.”
“My brother and I have grown the business to about as large as we can, based on our personal financial situation,” he told BIV. “But as the company has grown, and as we start pursuing bigger projects, it was getting to be a stretch.
“We see this as giving us some horsepower to make sure that the growth trajectory we’ve been on can continue. So it’s very much a growth and somewhat of a succession planning thing.
“I’m approaching 60, and I’ve got another five or 10 good years left, but when you build an organization this large and have as many people counting on you as we do, it’s nice to have a plan that goes beyond 10 years.”
Jacob Bros Construction was founded in 2008. The company specializes in heavy civil construction for both the private and public sectors.
The company is primarily a general contractor, though it also sometimes does some work as a subcontractor on bigger infrastructure projects, such as the Trans Mountain pipeline expansion.
“We’re predominantly know as a heavy civil contractor—roads, airports, bridges, that sort of thing—for public and private clients,” Scott Jacob said.
“We have a pretty well-established capacity for airport work. One of our cornerstone clients would be YVR. We’re also well known for highways work and utilities.”
The company works mainly in the Lower Mainland and Southern Vancouver Island.
For employees, clients and customers, little will change post-acquisition. Both Jacob brothers will continue on in their current roles and the company will keep its brand.
“It’s still Jacob Brothers, and it really is no change for our people,” Scott Jacob said. “It’s simply a change in ownership.”
The acquisition will give Bird a sizable share of construction work and revenue in B.C.
Bird estimates Jacob Bros will generate roughly $300 million in revenue and $37 million of adjusted EBITDA (earnings before interest, depreciation and amortization) in 2024.
“An existing backlog of approximately $350 million, combined with a robust outlook and cross-selling opportunities, will support further growth in adjusted EBITDA beyond the current year,” Bird said.
Despite four energy mega-projects—including the Trans Mountain pipeline expansion and the Site C dam—either winding down or completed in B.C., Scott Jacob said he is “bullish” about the construction sector over the next few years.
“I’m pretty optimistic, maybe even bullish, on the next two or three years,” he said.
“I think there is such a pent-up demand for infrastructure in all of Canada, but certainly Western Canada. With population growth comes the need for more infrastructure.”
