Aecon Group Inc. signed a deal to sell its contract mining business to North American Construction Group (NACG) Inc. for $199.1 million in cash.
The contract mining business provides overburden removal and environmental reclamation services, primarily in the Alberta oilsands.
Upon the deal, NACG paid Aecon a $10-million deposit, while the balance will be paid in four installments with the first payment of $153.6 million due when the deal closes.
The remaining three payments of $11.8 million each will be paid six, 12 and 18 months following closing.
Martin Ferron, Chairman and CEO of NACG said the transaction is expected to provide the company with over $220 million additional annual revenue capability, potentially increasing basic earnings per share upwards of $1.60 in 2019.
“During the recent severe cyclical downturn in the oil industry we worked extremely hard to be part of the solution to help lower the operating costs of our customers on the oil-sands mines.”
He said lower operating costs were achieved through innovative maintenance practices and work methodologies, which will be applied to the expanded fleet.
The sale is subject to various purchase price adjustments and customary closing conditions.
Aecon said it will continue to operate the business, with no disruption to its clients or employees, pending the close of the transaction.
The transaction includes Aecon’s fleet of heavy earth-moving and lighter construction assets, support equipment and maintenance facilities.
*With files from The Canadian Press
