On May 23, Aecon Group Inc. was informed that the Governor in Council has issued an order under the Investment Canada Act directing CCC International Holding Limited (“CCCI”) not to implement its proposed acquisition of Aecon. As a result, the Arrangement between Aecon and CCCI will not proceed.
“While we are disappointed with the government’s decision, Aecon is and will continue to be a leading player in the Canadian construction and infrastructure market,” said John M. Beck, President and Chief Executive Officer, Aecon Group Inc. “Through our proposed transaction with CCCI we had outlined a vision in which Aecon would be better able to compete with the many large global construction companies actively working in Canada. The deal offered considerable benefits to Aecon and its various stakeholders. While we have been prevented from pursuing the transaction, we are moving forward from a position of strength. Over the past several months Aecon has secured numerous large-scale projects, has a record backlog, and a significant pipeline of opportunities ahead of it.”
Aecon reported a backlog of CA$4.6bn at the end of the first quarter, which included CA$910M of new contract awards booked in the quarter. Subsequent to the end of the first quarter, Aecon announced:
A partnership, in which Aecon has a 24 percent interest, finalized a $5bn contract for the Réseau express métropolitain Montréal Light Rail Transit project. The project will add $1.2bn to Aecon’s backlog in the second quarter of 2018; and
A consortium, in which Aecon has a 33.3 percent interest in the equity and construction and a 50 percent interest in the 30-year maintenance agreement, secured the contract for the Finch West Light Rail Transit project, in Toronto. Total contract is valued at $2.5bn, which includes $1.2bn in construction costs. This project will add $400M to Aecon’s backlog in the second quarter of 2018.
As would have been the case if the transaction had proceeded, management of the company is not expected to change, however the company has reinstated its search for a new CEO. Mr. Beck will remain CEO until his successor has been selected. Aecon is no longer actively pursuing a sale process.