Aecon announces closing of Cow Harbour asset purchase and launch of new Aecon Mining business
Acquires assets of a ‘Top 3’ oil sands mining contractor
Toronto, Ontario – August 27, 2010: Aecon Group Inc. (“Aecon”) (TSX:ARE) today announced that it has completed the previously disclosed asset purchase of Fort McMurray based Cow Harbour Construction Ltd. (“Cow Harbour”), and that it will be retaining virtually all of Cow Harbour’s 300 employees in a new division to be called Aecon Mining.
Aecon Mining will operate within Aecon’s Infrastructure segment and, with its newly acquired assets and contracts, becomes one of the largest mining and land reclamation contractors in the oil sands. The new division complements Aecon Lockerbie’s position as one of the leading heavy industrial contractors in the oil sands.
Under the asset purchase agreement, Aecon acquired all of Cow Harbour’s capital assets in Alberta, including its fleet of over 500 pieces of mining equipment, as well as all of Cow Harbour’s real property, inventory, contracts, leases, licenses, intellectual property and other assets. Aecon paid $60 million on closing, and will pay a further $120 million within 90 days.
A private company founded in 1987, Cow Harbour had grown to become one of the top three mining and land reclamation companies in the oil sands, with over 800 employees, revenues of $230 million, and strong EBITDA performance, before it ran into difficulties when a number of operational issues emerged following consecutive years of rapid growth. The company filed for CCAA protection from its creditors in April of this year.
“This acquisition adds an entirely new dimension to Aecon’s ability to serve our clients in the oil sands,” said John M. Beck, Chairman and CEO of Aecon Group Inc. “It makes Aecon the first company able to bundle an array of services for clients as both a leading mining and leading industrial contractor.”
“The oil sands have long been a strategic priority for Aecon, and we are excited about expanding our capabilities through this new business,” stated Scott Balfour, President of Aecon Group Inc. “The combination of Aecon’s financial strength and management discipline, with Cow Harbour’s first rate employee base and equipment fleet, positions us well for expanded opportunities in a market that we believe will see strength for many years to come.”
“This acquisition provides the ideal platform for the launch of Aecon Mining, and does so at a discount to any other entry strategy,” said Teri McKibbon, CEO of Aecon’s Infrastructure group. “Not only does it make Aecon a leader in oil sands mining and reclamation, but it positions us well to respond to the growing number of contract mining opportunities across the country, as demand for Canada’s resource commodities continues to increase.”
Aecon Group Inc. is Canada’s largest, publicly traded construction and infrastructure development company. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and on a selected basis internationally. Aecon is committed to safely and profitably delivering best of class services and products in an environmentally sensitive manner, and is pleased to be recognized as one of the 50 Best Employers in Canada.
The information in this press release includes certain forward-looking statements. These “forward-looking” statements are based on currently available competitive, financial and economic data and operating plans but 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. Risk factors are discussed in greater detail in the section on “Risk Factors” in the Annual Information Form filed on March 31, 2010 and available at www.sedar.com. Forward-looking statements include information concerning possible or assumed future results of operations or financial position of Aecon, as well as statements preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “should” or similar expressions. Important factors, in addition to those discussed in this document, could affect the future results of Aecon and could cause those results to differ materially from those expressed in any forward-looking statements.
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