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Pierre Shoiry, seen Feb. 9, 2012, is president and CEO of Montreal consulting engineering firm Genivar Inc., which has been gobbling up smaller firms in Canada (Christinne Muschi For The Globe and Mail/Christinne Muschi For The Globe and Mail)
Pierre Shoiry, seen Feb. 9, 2012, is president and CEO of Montreal consulting engineering firm Genivar Inc., which has been gobbling up smaller firms in Canada (Christinne Muschi For The Globe and Mail/Christinne Muschi For The Globe and Mail)

Genivar fuelled by insatiable appetite for growth Add to ...

Montreal consulting engineering firm Genivar Inc. has gobbled up smaller companies at a breathtaking pace. Since CEO Pierre Shoiry took over in 1995, it has made 80 acquisitions, and has operations in every Canadian province and several foreign countries. Since the start of this year, it has acquired an engineering firm in Colombia and another in Calgary.

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With infrastructure rebuilding bound to be a key focus for governments and private companies in the decades ahead, Genivar is positioned to be a prime multinational player. Certainly, big institutional investors appear to think so: The Canadian Pension Plan Investment Board and the Caisse de dépôt et placement du Québec each recently took a 10-per-cent stake in the company.

What is the strategy behind your serial acquisitions?

[First,]our focus was to develop the Canadian platform, and basically expand from coast to coast. Now we have offices from Victoria to St. John’s, so we are right across Canada. The second phase of our development [is]to become a global player. We have set the goal of having 50 per cent of our revenue from outside Canada by end of 2013, or early 2014. Right now we are about at 3 or 4 per cent. We work in about 25 countries where we have projects for either Canadian clients or international clients. Our permanent operations are in Trinidad and Tobago, and in France, and we just did an acquisition in Colombia.

Why is it important for Genivar to have a presence in every province?

It was really important to build that national platform and be able to service our clients in all provinces in both languages. We are probably one of the few firms that can work with national [clients]such as Target stores. We have local knowledge of all the regulatory requirements in every province.

Where do you want to expand internationally?

First we’d like to expand in the industrialized markets, in the Commonwealth countries, the U.S., and some selected European countries. In emerging markets, we are focused mostly on resource-based countries that have infrastructure needs. [But they need to]have some geopolitical stability and decent commercial practices. We’d like 10-to-15 per cent of our revenue to be derived from emerging markets, and the remainder from industrialized countries.

Are we going to see more consolidation in the consulting engineering business?

There is certainly a trend globally for consolidation. Having a global network has numerous advantages. For your investors, you have market diversification. For clients, you can service them wherever they operate. And on a professional level you have access to [broader]expertise. You can leverage your expertise from one country to another.

Is there an infrastructure crisis in Canada and around the world?

We need to catch up. There is a deficit. And obviously in emerging markets there is a need for implementing new infrastructure that is not in existence. So there is definitely an important need for infrastructure on a world scale.

What’s Canada’s position?

In Canada we’ve done well in the past decade … in recognizing the needs and investing more in infrastructure, so I think we are on the right track. [But]we have to commit to long-term maintenance and spending.

Is the perception of corruption in Quebec’s construction and infrastructure sector unfair?

In every industry there is the potential for problems, not only in the construction industry. We have seen it in financial industries. We have to remain alert to problems that can arise. As a company, we have taken the steps to make sure that we maintain very high ethical standards, and that our professionals act correctly. It is up to each company to do their share.

You recent brought the Caisse and the CPPIB on board as big investors. Does that change your strategy?

No, not really. We have a very strong foundation now, in Canada, on a corporate level. We wanted to have a very strong foundation on a financial level. So we are very pleased to have the two largest pension funds in Canada commit a significant amount of capital.

Is consulting engineering recession-proof?

Nobody is immune. But what we like about our business is that you can weather economic downturns more efficiently. [That’s]why are we diversified in different regions. Also, we have a good mix of public- and private-sector clients. The strategy is to have geographic diversification, market segment diversification, client diversification, and [a broad]project mix. With that you can react better to downturns.

What are the key environmental risks in engineering right now?

Environment for us is more of an opportunity than a risk. Permitting issues, climate-change issues, and air quality are all very important and we [can help]our clients address all those concerns.

What is the secret to successfully integrating new acquisitions into your existing business?

It is all about the people. It is about relationships, and managing expectations. It is about making sure that we have fun. [To ensure]we have a high retention rate of our people, and have their engagement post-transaction, the key is soft issues – it is not about money. It is very important that we have a shared vision, that we have similar values and cultures, and that we are fully aligned on the same game plan going forward.

Like many other former income trusts, you have shifted to a corporate model. What are the advantages?

Globally, a corporate model is more widely recognized and understood. It also simplifies things. We are just a regular corporation with one type of shares. Everybody is equal. There are no preferreds. It is much more easily understood.

What keeps you up at night?

There is not one specific thing. If you look at our annual report, there are five pages of risks. The general economy is always a worry. But for us it is important that our employees are aligned and engaged, and that we service our clients well. We are consulting engineers, so maintaining a high degree of integrity and ethics, and making sure that our reputation is stellar, is very important.

As a global company, how important are new communication technologies?

Today the biggest challenge in an organization like ours, is getting people to communicate. The depth of knowledge is tremendous, and right now we have people all over the place, so knowledge sharing is important. When we bring in an acquisition, our main focus is making sure that everybody knows about it, they know what these people do, they know their skills, they know their trades. We want people to interact, we want people to share information, and that is a lot of work.

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PIERRE SHOIRY

Title: President and CEO, Genivar Inc.

Personal: 54 years old, born in Quebec City.

Education:

- Bachelor of civil engineering, Laval University;

- Masters of applied science, Laval University.

Career highlights

- Started work at an engineering firm in Quebec City in 1980.

- Joined Genivar in 1989, when it had fewer than 90 employees.

- Promoted to senior associate engineer for municipal infrastructure, then vice-president of business development.

- Became president of Genivar in 1995.

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