Colliers plans to acquire Canadian engineering and environmental services firm Englobe Corp. as the global real estate brokerage joins rivals in expanding business lines that are not as reliant on commission-driven revenue generated by property sales and other transactions.

Toronto-based Colliers signed a deal to pay US$475 million in cash to acquire a “significant controlling interest” in Laval, Quebec-based Englobe, with plans to rebrand the company that has more than 2,800 employees as Colliers next year.

The transaction comes as Colliers and other brokerages expand their offerings in such services as engineering, project management, technology and other non-transaction businesses that generate fee revenue during slower periods for property sales and leasing.

Colliers last year acquired Craig & Rhodes Pty Limited, an engineering, design and survey firm in Australia, and a majority stake in Greenstone Group Ltd., an Auckland, New Zealand-based project management and property advisory firm.

The brokerage reported first-quarter revenues rose 4% to $1 billion from the prior-year quarter, driven by an uptick in leasing and a 9% revenue jump in non-transaction services such as property and project management, engineering and consulting.

Colliers, the fourth-largest commercial real estate brokerage by revenue, expects to enter new U.S. markets, buy more of its affiliates and recruit more talent in the months ahead, Chris McLernon, CEO of real estate services, told investors during the first-quarter earnings call. He also cited interest in acquiring operations in Houston, Denver, South Carolina and Columbus, Ohio.

Colliers has a “very interesting pipeline” of potential acquisitions that the company could integrate with its operations in different parts of the world, CEO Jay Hennick said during the call.

“For example, in engineering, we might want to augment one or two components of our business in a particular region, so there's a nice opportunity for us to just strengthen our business and widen our capabilities,” Hennick said.

Englobe’s senior leadership team and employee shareholders will remain shareholders under Colliers after the transaction that is expected to close in the third quarter.

“The acquisition "marks a significant entry for Colliers into the Canadian engineering marketplace and aligns perfectly with our strategy of enhancing our growing professional services and investment management company with high-value, resilient, and essential services,” Hennick said in a statement.

Engineering is one of three “significant and complementary global growth engines” for Colliers that also include investment management and commercial real estate services, Hennick said in the statement announcing the Englobe deal. Revenue from engineering, investment management and outsourcing will represent about 75% of the company’s total earnings when the Englobe transaction closes, Hennick added.

The Quebec-based company’s material management and beneficial reuse operations in the United Kingdom, France and Canada — involving composting, and treatment and recycling of contaminated soils and other would-be waste — aren’t included in the transaction, the companies said in a statement.

In the United States, Colliers plans to expand by beefing up teams in some major cities, its United States CEO said in an interview with CoStar News in April.

Colliers in April expanded its brokerage operation to Louisiana and hired veteran New Orleans-area broker Chris Abadie as a senior vice president to lead its office and expansion efforts across that state. It also purchased its Philadelphia affiliate to boost its operations in the mid-Atlantic region.

"It's a good thing that we're able to do it, and that goes to our strong balance sheet in the size and scale of Colliers," Gil Borok, CEO of Colliers in the United States and Latin America, said. "So we can do it when the opportunity presents, regardless of the macroeconomic environment."

The company is also beefing up its brokerage operations, the largest part of its business, in the United States as deals pick up after years of slowed commercial real estate demand caused by economic uncertainty and the pandemic.

The firm's acquisitions of affiliates and other businesses have bolstered the brokerage's revenue, with about $1 billion in free cash flow for more acquisitions in the United States and overseas.

Colliers and other commercial property brokerages said in February they expect this year’s earnings will be more heavily weighted to the second half of 2024 as they look for capital markets and leasing activity to start a tentative recovery.