TORONTO, May 23, 2018 /CNW/ - Aecon Group Inc. (TSX:
ARE) ("Aecon" or the "Company") was informed today that the
Governor in Council has issued an order under the Investment Canada
Act directing CCCC International Holding Limited ("CCCI") not to
implement its proposed acquisition of Aecon. As a result, the
Arrangement between Aecon and CCCI will not proceed.
"While we are disappointed with the government's decision, Aecon
is and will continue to be a leading player in the Canadian
construction and infrastructure market," said John M. Beck, President and Chief Executive
Officer, Aecon Group Inc. "Through our proposed transaction with
CCCI we had outlined a vision in which Aecon would be better able
to compete with the many large global construction companies
actively working in Canada. The
deal offered considerable benefits to Aecon and its various
stakeholders. While we have been prevented from pursuing the
transaction, we are moving forward from a position of strength.
Over the past several months Aecon has secured numerous large-scale
projects, has a record backlog, and a significant pipeline of
opportunities ahead of it."
Aecon reported a backlog of $4.6
billion at the end of the first quarter, which included
$910 million of new contract awards
booked in the quarter. Subsequent to the end of the first quarter,
Aecon announced that:
- a partnership in which Aecon has a 24 per cent interest
finalized a $5.0 billion contract for
the Réseau express métropolitain Montréal Light Rail Transit
project. The project will add $1.2
billion to Aecon's backlog in the second quarter of 2018;
and
- a consortium in which Aecon has a 33.3 per cent interest in the
equity and construction and a 50 per cent interest in the 30-year
maintenance agreement, secured the contract for the Finch West
Light Rail Transit project in Toronto. Total contract is valued at
$2.5 billion, which includes
$1.2 billion in construction costs.
This project will add $400 million to
Aecon's backlog in the second quarter of 2018.
As previously disclosed in Aecon's first quarter 2018 results,
the Company continues to expect revenue growth and adjusted EBITDA
margin improvement in 2018 versus the prior year. The overall
outlook is positive with areas of strength in Aecon's business in
infrastructure, nuclear, telecom, gas and power distribution,
expected to outweigh the impact of fewer opportunities in commodity
and oil related markets. Aecon's balance sheet continues to be
well-capitalized and the Company is confident in its ability to
increase capacity as required to facilitate growth.
"We are fortunate to have a strong market position, effective
industry partnerships, and outstanding employees, all of which will
help drive our future success," Mr. Beck said.
Aecon will remain publicly traded on the Toronto Stock Exchange
and its headquarters will continue to be in Toronto, with regional offices in Calgary and Vancouver. As would have been the case if the
transaction had proceeded, management of the company is not
expected to change. The company has reinstated its
search for a new Chief Executive Officer. Mr. Beck will remain as
CEO until his successor has been selected.
"Our dedicated board of directors, who were recently re-elected
at Aecon's May 10PthP Annual General Meeting, remain
committed to providing ongoing guidance and governance to drive
shareholder value and work in the best interest of the Company,"
said The Hon. Brian V. Tobin, P.C.,
O.C., Aecon's Chairman. "The board is also focused on the ongoing
CEO search to select the right leader to guide the company in the
future."
The Special Committee of the Board of Directors has been
dissolved and, while Aecon's Board considers strategic options in
the best interest of the Corporation from time to time, Aecon is no
longer actively pursuing a sale process.
ABOUT AECON
Aecon Group Inc. (TSX: ARE) is a Canadian leader and
partner-of-choice in construction and infrastructure
development. Aecon provides integrated turnkey services to
private and public-sector clients in the Infrastructure and
Industrial sectors, and provides project management, financing and
development services through its Concessions segment. For more
information, please visit aecon.com and follow us on Twitter at
@AeconGroup.
STATEMENT ON FORWARD-LOOKING INFORMATION
The information in this press release includes certain
forward-looking statements. Although these forward-looking
statements are based on currently available competitive, financial
and economic data and operating plans, they are subject to risks
and uncertainties. In addition to general global events outside
Aecon's control, there are factors which could cause actual
results, performance or achievements to vary from those expressed
or inferred herein including risks associated with an investment in
the common shares of Aecon and the risks related to Aecon's
business, including, but not limited to interest and foreign
exchange rates, global equity and capital markets, business
competition and operational and reputational risks, including Large
Project Risk and Contractual Factors, Risk factors are discussed in
greater detail in the section on "Risk Factors" included in the
Company's Annual Information Form dated March 27, 2018, which is available through
SEDAR at www.sedar.com. Forward-looking statements include
information concerning possible or assumed future results of
Aecon's operations and financial position, as well as statements
preceded by, followed by, or that include the words "believes",
"expects", "anticipates", "estimates", "projects", "intends",
"should" or similar expressions. Other important factors, in
addition to those discussed in this document, could affect the
future results of Aecon and could cause its results to differ
materially from those expressed in any forward-looking statements.
Aecon assumes no obligation to publicly update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.
SOURCE Aecon Group Inc.