Shares in the AIM-listed property services group drifted lower shortly after the announcement, although investors saw 30% share price gains on Monday.
The tie-up will see both businesses jointly market and deliver combined cost planning and cost management and related consultancy services on select real estate projects across Canada.
No financial details were included in the statement, although it said that both parties will capitalise on cross-selling opportunities throughout their combined global network of offices.
"Amalgamating our expertise in service delivery with our track record of delivering high-end projects in the public, private and infrastructure markets will greatly benefit both existing and new clients,” said Douglas McCormick, Sweett Group chief executive.
Last year, the Wall Street Journal alleged that an ex-employee of Sweett requested a bribe for £64.7mln to complete a deal.
It said the former executive “met an employee of a New York-based architecture firm and requested 3.5% of the contract value be paid to a United Arab Emirates official helping fund the project”.
In November, the Serious Fraud Office in the UK told Sweett that it wasn’t cooperating fully with the watchdog because it was continuing to carry out its own internal inquiry into the allegations.
Around that time, the group also sent out a profit warning for 2015 that said profits would be below expectations, in part due to investigation costs.
Commenting on today’s news, Westhouse Securities analyst Robert Sanders said he viewed the tie-up with Pelican Woodcliff as a sensible move.
He added: “While the uncertainties remain over the Wall Street Journal allegations, we continue to believe that the business will see good trading momentum under the new management team given the economic backdrop particularly in the UK.”