Opus International Consulting has restarted its acquisition programme after two and a-half years, but Forsyth broker Suzanne Kinnaird remains wary.
"The New Zealand operations continue to perform very strongly and it is the overseas operations that struggle to match New Zealand."
Opus is buying the Canadian firm Dayton & Knight for $C15 million ($NZ19 million), of which $C3 million will be in Opus shares.
Ms Kinnaird said it was the first acquisition by Opus since May 2008, when it bought a small operation in Eastern Canada.
Dayton & Knight was an engineering consulting business with 90 staff that specialised in water and wastewater.
Opus expected the Dayton & Knight business to contribute more than $2 million to the 2011 full-year profit.
"Assuming Dayton & Knight performs as expected, we are comfortable with the price that Opus has paid.
"Our main area for concern is that Dayton & Knight is earning very good margins - some of the best within the Opus Group."
The acquisition would add around 4% to Opus' staff base but a "massive" 9% to the profit after tax, she said.
There appeared little scope for margin growth, meaning there was only down-side risk on margins, putting added pressure on growing the revenue base.
Dayton & Knight's specialisation would add to the ability of Opus to service the water sector and added about 50% more staff to that part of the group, Ms Kinnaird said.
That should mean there were opportunities for Opus to leverage off the Canadian firm's knowledge base.
The firm had strong name recognition in British Colombia and its main clients were local and regional councillors.
The full-year 2010 profit forecast had only been "tweaked", as the acquisition would not significantly impact until next year, she said.
However, one point to note was the small drop in the dividend per share forecast following the issuance of new shares to partly pay for the acquisition.
Forsyth Barr valued Opus at $2.04 a share.
Shares last traded at $1.82.
