Complements strategic focus on end markets
related to energy transition and sustainability
Strengthens balance sheet
Go-forward strategic cooperation agreement
with GIP
TORONTO, March 1,
2023 /CNW/ - Aecon Group Inc. (TSX: ARE) ("Aecon" or
the "Company") announced today that it has entered into a
definitive purchase agreement with Green Infrastructure Partners
Inc. ("GIP") under which Aecon has agreed to sell its Aecon
Transportation East ("ATE") roadbuilding, aggregates and materials
businesses in Ontario for
$235 million in cash.
ATE provides roadbuilding infrastructure solutions throughout
Ontario to the provincial
government, municipalities, and private clients through a workforce
of approximately 1,000 employees.
In 2022, ATE's revenue represented approximately 7% of Aecon's
consolidated revenue as part of the Construction segment.
"Aecon's efforts are increasingly focused on helping meet its
clients' sustainable infrastructure needs and harnessing the
opportunities that are expected to come from the transition to a
net zero economy through decarbonization," said Jean-Louis Servranckx, President and Chief
Executive Officer, Aecon Group Inc. "This transaction is consistent
with Aecon's goal of targeting prudent balance sheet leverage and
liquidity and also reduces the overall capital intensity of Aecon's
business."
Strategic Cooperation
Agreement
Upon closing of the sale, Aecon and GIP will enter into a
strategic cooperation agreement for certain major projects and
pursuits in Ontario that leverage
both Aecon's heavy civil construction services and GIP's
roadbuilding capabilities.
Use of Proceeds
Upon closing, Aecon expects to use the net proceeds from the
transaction to pay down debt on its revolving credit facility.
Aecon plans to maintain a disciplined capital allocation approach
focused on long-term shareholder value.
Approvals and Time to
Close
The Aecon Board of Directors and the GIP Board of Directors have
each approved the transaction. ATE will continue to operate in the
normal course pending closing of the sale transaction which is
expected in the first half of 2023 and is subject to customary
adjustments and closing conditions, including obtaining all
necessary regulatory approvals. In the event the transaction does
not close as a result of GIP's failure to obtain financing for the
acquisition, GIP has agreed to pay a reverse break-fee to Aecon of
$15 million.
Advisors
CIBC Capital Markets is serving as exclusive financial advisor
to Aecon, and Davies Ward Phillips & Vineberg LLP is serving as
legal counsel.
About Aecon
Aecon Group Inc. (TSX: ARE) is a national Canadian construction
and infrastructure development company with global experience and
is proud to be recognized as one of the Best 50 Corporate Citizens
in Canada. Aecon delivers
integrated solutions to private and public-sector clients through
its Construction segment in the Civil, Urban Transportation,
Nuclear, Utility and Industrial sectors, and provides project
development, financing, investment and management services through
its Concessions segment. Join our online community on Twitter,
LinkedIn, Facebook, Instagram and TikTok @AeconGroupInc.
Statement on Forward-Looking
Information
The information in this press release includes certain
forward-looking statements which may constitute
forward-looking information under applicable securities laws. These
forward-looking statements are based on currently available
competitive, financial and economic data and operating plans but
are subject to risks and uncertainties. Forward-looking statements
may include, without limitation, statements regarding the
operations, business, financial condition, expected financial
results, performance, prospects, ongoing objectives, strategies and
outlook for Aecon, including statements regarding: Aecon's sale of
ATE to GIP, the expected results therefrom, use of proceeds from
the transaction and related transaction timeline; Aecon's strategic
partnership agreement with GIP and the results therefrom; Aecon's
strategic focus on clean energy and other projects linked to
sustainability and the opportunities arising therefrom;
Aecon's goal of targeting prudent balance sheet leverage
and liquidity and Aecon's plan to maintain a disciplined capital
allocation approach focused on long-term shareholder value.
Forward-looking statements may in some cases be identified by words
such as "may", "will," "plans," "believes," "expects,"
"anticipates," "estimates," "projects," "intends," "should" or the
negative of these terms, or similar expressions. In addition to
events beyond Aecon's control, there are factors which could cause
actual or future results, performance or achievements to differ
materially from those expressed or inferred herein including, but
not limited to: the risk that the transaction will not close; the
risk that the strategic partnership with GIP will not realize the
expected results and may negatively impact Aecon's existing
business; the risk that Aecon will not realize the opportunities
presented by a transition to a net-zero economy; the risk that
Aecon will not realize the anticipated balance sheet flexibility
with the completion of the transaction and various other risk
factors described in Aecon's filings with the securities regulatory
authorities which are available under Aecon's profile on SEDAR
(www.sedar.com) including the risk factors described
in Section 13 - "Risk Factors" in Aecon's December 31, 2022 Management's Discussion and
Analysis filed on SEDAR (www.sedar.com) on February 28, 2023.
These forward-looking statements are based on a variety of
factors and assumptions including, but not limited to that: none of
the risks identified above materialize, there are no unforeseen
changes to economic and market conditions and no significant events
occur outside the ordinary course of business. These assumptions
are based on information currently available to Aecon, including
information obtained from third-party sources. While the Company
believes that such third-party sources are reliable sources of
information, the Company has not independently verified the
information. The Company has not ascertained the validity or
accuracy of the underlying economic assumptions contained in such
information from third-party sources and hereby disclaims any
responsibility or liability whatsoever in respect of any
information obtained from third-party sources.
Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they
are made and Aecon undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
SOURCE Aecon Group Inc.