CONTRACTING: NACG expands heavy construction fleet

[caption id="attachment_1003725078" align="aligncenter" width="470"] NACG has purchased the heavy equipment fleet of Aecon for $199.1 million.[/caption] ALBERTA – North American Construction Group announced on Oct. 3 that it has entered into a definitive purchase and sale agreement to acquire the heavy construction equipment fleet and related assets of Aecon Group for $199.1 million in cash, subject to customary closing adjustments. A $10 million deposit was paid upon signing the agreement, which will be credited towards the purchase price on closing. The balance of the price will be paid in four instalments with the first instalment of $153.6 million due at closing and the following three instalments of $11.8 million each being paid six, 12 and 18 months following closing. “The transaction is expected to provide NACG with over $220 million of additional annual revenue capability which we anticipate will soon be underpinned by term contracts with multiple customers,” said Martin Ferron, chairman and CEO of NACG. The Transaction involves the purchase of Aecon’s fleet of heavy earth moving assets, together with lighter construction assets, support equipment and maintenance facilities. Additionally, existing contractual commitments will be assigned to NACG, subject to customer and partner consents. The transaction will be fully financed at closing through an upsized and extended credit facility with NACG’s existing lenders. Given the strong addition to free cash flow from this purchase, as well as the company’s previously announced acquisition of an ownership interest in Nuna Logistics, NACG intends to use operational cash flow to de-lever its balance sheet by around $150 million over the next three years, while still having sufficient cash flow to apply to other growth initiatives. North American Construction Group (www.NACG.ca) is a premier provider of heavy construction and mining services in Canada.