SUBJECT: BIRD BOLSTERS CAPABILITIES, CAPACITY, AND RECURRING REVENUE WITH AGREEMENT TO ACQUIRE LEADING ALBERTA ELECTRICAL SERVICE PROVIDER
Bird Construction Inc. (TSX: BDT) announced today that it has acquired the assets of NorCan Electric Inc. (“NorCan”) for a total consideration of $11 million. The transaction is expected to be accretive, enhancing earnings per share by $0.04 in 2024. All transaction agreements have been completed, and the transaction is effective today.
NorCan is a leading electrical and instrumentation contractor with up to 450 electricians providing maintenance turnaround and sustaining capital services in the Regional Municipality of Wood Buffalo in Alberta. During their 25 years of service in the region, they have developed deep, long-term relationships based on their strong service delivery and safety program. Since 2018, NorCan has operated through an Indigenous partnership, the NorCan/Infinity Limited Partnership, with Infinity Métis Corporation.
Aligned with Bird’s strategy to seek out tuck-in acquisitions with strong operational and cultural fit, NorCan aligns well with Bird’s maintenance, repair, and operations (“MRO”) team, operating under its wholly owned Stuart Olson subsidiary. The acquisition advances Bird’s growth strategy with electrical contracting capabilities, contributing to the Company’s recurring MSA revenue programs through a recently renewed multi-year MSA contract for electrical and instrumentation services with a strategic, long-term NorCan client. The acquisition drives growth in Bird’s self-perform power distribution capabilities, complementing Bird’s existing high voltage capabilities, in addition to expanding electrical and instrumentation capabilities on large, complex industrial facilities in Canada and the United States.
Bird’s MRO team is a top-tier industrial services organization, and, like NorCan, they share a commitment to leading safety programs and outstanding client service. Together, these strengths are expected to bolster operational efficiencies, expand capacity, and generate cross-selling opportunities with major clients in the region. The transaction also provides the opportunity for geographic diversification by opening the door for Bird to cross-sell its services to existing NorCan client relationships in the United States.
“We are extremely excited to be forming this Indigenous partnership with Bird. This will positively impact the McMurray Métis with the opportunities that this partnership presents for the community and its Members,” shared Shawn Myers, President and CEO of Infinity Métis Corporation.
"We are pleased to announce that NorCan has been acquired by Stuart Olson’s parent company, Bird Construction. This is an exciting and natural transition, which will serve to bolster the already high-quality service that NorCan has always provided to their customers," commented Cameron Cassels, President of NorCan.
“We are very pleased to welcome the NorCan team to Bird, and we look forward to working with the Infinity Métis Corporation to continue delivering excellence in the region while supporting economic action and reconciliation by creating opportunities for growth in the community," stated Teri McKibbon, President and CEO of Bird. "NorCan strategically aligns with our M&A strategy, bringing high growth potential and cultural cohesion. Integrating NorCan offers new opportunities for both our teams while enhancing self-perform capabilities and operational efficiencies. The expansion of our MRO business grows our recurring revenue MSAs, providing additional long-term visibility to the Company’s continued growth and margin accretion.”
TERMS OF THE TRANSACTION
The purchase price of the transaction is $11 million. The Company is primarily acquiring all customer contracts, NorCan’s share of the NorCan/Infinity Limited Partnership as a partner with Infinity Métis Corporation, equipment and other fixed assets, and the highly qualified workforce and team providing services to clients. No working capital was acquired as part of the transaction. Bird will inject cash into the business to fund operations. Bird financed 85% of the purchase price with debt, with the balance coming from Bird treasury shares. The consideration mix aligns the interests of NorCan’s principals with Bird’s shareholders and maintains Bird’s strong balance sheet with optionality for potential future M&A activities.
For modelling purposes, investors can assume an accretion of approximately $0.04 cents to Bird’s full-year EPS from the acquisition, anchored by a multi-year MSA with Bird’s share valued at $130 million, which has been added to Pending Backlog.
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.
For further information, contact:
T.L. McKibbon, President & CEO or
W.R. Gingrich, CFO
Bird Construction Inc.
5700 Explorer Drive, Suite 400
Mississauga, ON L4W 0C6
Phone: (905) 602-4122
About Bird Construction
Bird (TSX: BDT) is a leading Canadian construction company operating from coast-to-coast and servicing all of Canada's major markets. Bird provides a comprehensive range of construction services from new construction for industrial, infrastructure and buildings markets to industrial maintenance, repair and operations services, heavy civil construction, and mine support services, as well as vertical infrastructure, including electrical, mechanical, and specialty trades. For over 100 years, Bird has been a people-focused company with an unwavering commitment to safety and a high level of service that provides long-term value for all stakeholders. www.bird.ca
FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable Canadian securities laws. The forward-looking statements contained in this news release are based on the expectations, estimates and projections of management of Bird as of the date of this news release unless otherwise stated. The use of any of the words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intend", "continue", "may", "will", "should" and similar expressions are intended to identify forward-looking statements and information. More particularly and without limitation, this news release contains forward-looking statements concerning: anticipated financial performance; the future performance of acquired entities; the extent of operational efficiencies and expanded capacity; the Company’s ability to capitalize on opportunities; and with respect to Bird’s ability to convert Pending Backlog to Backlog and the timing of conversions.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which the Company operates in general such as: the ability to hire and retain qualified and capable personnel, maintaining safe work sites, economy and cyclicality, ability to secure work, global pandemics, performance of subcontractors, accuracy of cost to complete estimates, estimating costs and schedules/assessing contract risks, adjustments and cancellations of Backlog, work stoppages, strikes and lockouts, acquisition and integration risk, potential for non-payment, litigation/potential litigation, design risks, information systems and cyber-security risk, competitive factors, completion and performance guarantees, access to capital, quality assurance and quality control, access to surety support and other contract security, insurance risk, climate change risk, joint venture risk, ethics and reputational risk, compliance with environmental laws, internal and disclosure controls, and payment of dividends.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties, and the combined company are included in reports on file with applicable securities regulatory authorities, including but not limited to; Bird's Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2022, each of which may be accessed on Bird’s SEDAR+ profile, at www.sedarplus.ca and on the Company’s website at www.bird.ca.
The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as, and to the extent required by applicable securities laws.