Bird Construction and Stuart Olson have entered into a definitive arrangement agreement under which Bird will acquire Stuart Olson for aggregate consideration of $96.5 million.
The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to close early in the fourth quarter of 2020, subject to obtaining the required approval.
"The combination of our two businesses will create a company with substantially increased breadth and scale, diversified across services, end-markets and geographies," said Terrance L. McKibbon, President and CEO of Bird. "In addition to combining two strong, experienced workforces, customers will benefit from a dynamic, integrated suite of construction services. The additional scale, leading technology platform and comprehensive service solution will position the company to deliver sustainable value and continuing dividends to shareholders. The combination of reduced interest expense and operating synergies is expected to generate accretion in operating cash flows and Adjusted Earnings Per Share in the first full-year."
"After a period of extensive review and consideration of the strategic and financial alternatives reasonably available to Stuart Olson, the Board determined that this Transaction is in the best interests of Stuart Olson and its shareholders given the current and go forward balance sheet and leverage metrics challenges facing Stuart Olson," said David LeMay, President & CEO of Stuart Olson. "We and Bird have a similar history with roots dating back over 100 years in Canada, a shared strategic focus on growth in our respective businesses and strong cultural alignment throughout our organizations. In the face of the challenges currently being experienced by Stuart Olson, including operating under risks related to the COVID-19 pandemic, and the significant economic changes in Canada, it's a move that renews opportunities for our people, expands new services to our clients and is expected to create long-term value for all our stakeholders."
Bird intends to finance the transaction through a combination of common shares of Bird and cash, allowing Stuart Olson's stakeholders receiving shares with the opportunity to participate in the future growth of the combined business.
The transaction is expected to close early in the fourth quarter of 2020.