A composite carbon fibre antenna at a Calian research facility in Saskatoon. The company faces headwinds from activist investor Matt Proud, who has been pressing it to refocus the business.Nayan Sthankiya/The Globe and Mail
Canadian defence contractor Calian Group Ltd. CGY-T will be under new leadership by the end of the year, as the company wraps up an internal audit and faces headwinds from an activist investor pressing it to refocus its business.
Kevin Ford will retire from his role as chief executive officer after 10 years, capping off 15 years with the company. Patrick Houston, current chief financial officer and chief development officer, will take his place effective Jan. 1, 2026. A new CFO will be hired to replace Mr. Houston.
“The energy it takes to run a publicly traded company in today’s world is not insignificant. So, I felt it was a good time for me to take some time, recharge, reflect, spend time with family and friends,” Mr. Ford said in an interview.
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The shakeup is happening at the same time as a campaign by activist investor Matt Proud, who owns a 5-per-cent stake in Calian through his private holding company Plantro Ltd., to have the Ottawa-based business sell its underperforming IT and cyber solutions (ITCS) division.
However, Mr. Ford said his decision to step down as CEO has nothing to do with Plantro’s call for change at the company.
“Whether it’s Plantro or any shareholders, we’re always anxious to hear from our shareholders on the company, and we look forward to those dialogues. But this specifically, as a personal decision, is really not connected to Plantro or that effort they’re working on,” he said.
The decision to retire from the role is something the 61-year-old executive said he’s been thinking about for the past year, and he feels confident he’s leaving the company in a strong position to benefit from Ottawa’s defence spending blitz.
Calian is currently composed of multiple divisions, including defence, technology, health, training and IT and cyber solutions.
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In August, Plantro sent a letter to the board of directors pressing it to refocus the business and capitalize on the “once-in-a-generation growth opportunity” presented by Canada’s heightened defence spending. Prime Minister Mark Carney has pledged to boost defence spending to 2 per cent of GDP this fiscal year, and 5 per cent by 2035.
In a follow-up letter to the board, sent on Sept. 28 and obtained by The Globe and Mail, Plantro reiterated its desire to see Calian sell its ITCS business, appoint Plantro representatives to the board and initiate a strategic review led by a committee composed of independent directors recommended by Plantro.
In the letter, Plantro said its plan is “focused on divesting non-core assets, driving organic growth with a much more refined focus on the defence industry, reining in expenses and restoring the trust of shareholders by issuing updated guidance that is rooted in current reality.”
In a written statement on Tuesday, Mr. Proud said the change in leadership at Calian is a “great time for a strategic reset.”
Calian is close to completing a portfolio review, which the company says was under way before Plantro began to apply pressure.
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Mr. Ford said discussions between the company and its board of directors are continuing and that its quarterly results in November will provide more clarity on its strategic direction.
“Defence, space and health will continue to be a focus for us moving forward and as we look at other areas of our business, we will decide how best to either optimize them or maybe look at a different home for them longer term,” he said.
The option to divest parts of the business isn’t off the table, he said. But he reiterated that Calian’s ITCS division is integral to its defence work. “Having a cyber capability is going to be critical to attack the defence market.”
Incoming CEO Mr. Houston said in a press release that he plans to deepen the company’s presence in defence, space and health markets, while “simplifying” the business and “redeploying capital” from its non-core assets.
Previously, Mr. Houston worked at a number of technology and securities-focused companies after beginning his career at Deloitte. He has also served on the board of the Canadian Association of Defence and Security Industries.