Stuart Olson Inc (TSX: SOX) has acquired the outstanding shares of Tartan Canada Corp, a Calgary-based mechanical maintenance, repairs and operations business.
Stuart Olson, a Calgary-based solutions provider to the Canadian construction and industrial services market, paid about $12 million.
It said the acquisition will give the company access to a larger share of the industrial market both in terms of mechanical and general contracting opportunities.
Established in 1953, Tartan was acquired in 2006 by Banyan Capital Partners, a Canadian private equity firm and affiliate of Connor, Clark & Lunn Financial Group.
Stuart Olson Completes Acquisition of Tartan Canada Corporation
CALGARY, Nov. 6, 2018 /CNW/ – Stuart Olson Inc. (TSX: SOX, SOX.DB.A) (“Stuart Olson” or the “Company”) today announced it has successfully acquired all of the outstanding shares of Tartan Canada Corporation (“Tartan”) for a purchase price of approximately $12 million, which is subject to customary holdbacks and adjustments.
Founded in 1953, Tartan is a privately held Western based mechanical maintenance, repairs and operations (MRO) company headquartered in Calgary. Tartan has approximately 400 employees and has both union and non-union capabilities. For the twelve months ended September 30, 2018, Tartan is estimated to have generated revenue of approximately $70 million, adjusted EBITDA of approximately $3.5 million and have a backlog of approximately $50 million. The backlog primarily consists of contracted MRO and plant turnarounds.
Tartan will be fully integrated within Stuart Olson’s Industrial Group. Bob Myles, Stuart Olson’s Industrial Group’s Chief Operating Officer, who was previously Tartan’s President & CEO up until January 2016, will lead the process of integrating Tartan into the Company.
“This acquisition represents an important milestone for our Industrial Group to further its abilities as an integrated solutions provider. Our growth strategies are centered on building both scope and scale by targeting the addition of complementary trade services. Tartan’s mechanical MRO capabilities will expand our Industrial Group’s access to a larger share of the industrial market both in terms of mechanical and general contracting opportunities,” said David LeMay, President and CEO of Stuart Olson.
“Tartan is very excited to be part of the Stuart Olson family and now have access to its large industrial customer base. Tartan brings a strong reputation of providing safe, high quality, cost effective and on time heavy industrial services,” said Doug Lautermilch, President & CEO of Tartan.
The Company expects this transaction to be immediately accretive to Stuart Olson and the purchase price due at closing, will be paid in cash and financed through the Company’s existing revolving credit facility. The Company will provide further commentary on this acquisition in its third quarter results conference call on November 7, 2018 scheduled for 9:30 am ET / 7:30 am MT.
ABOUT STUART OLSON INC.
Stuart Olson Inc. provides general contracting and electrical building systems contracting in the public and private construction markets as well as general contracting, electrical, mechanical and specialty trades, such as insulation, cladding and asbestos abatement, in the industrial construction and services market. The Company operates office locations and projects throughout Western Canada, Ontario and the territories. Stuart Olson was recognized as one of Alberta’s Top 70 Employers in 2018 for the second consecutive year. Stuart Olson’s common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols “SOX” and “SOX.DB.A”, respectively. www.stuartolson.com
For further information: David LeMay, President and Chief Executive Officer, Stuart Olson Inc., (403) 685-7777, Email: [email protected]; Daryl Sands, Executive Vice President and Chief Financial Officer, Stuart Olson Inc., (403) 685-7777, Email: [email protected]
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