Aecon sells Ontario roadbuilding business for $235M
Aecon Transportation East has a workforce of approximately 1,000.
Aecon Group has entered into an agreement with Green Infrastructure Partners Inc. (GIP) to sell its Aecon Transportation East (ATE) roadbuilding, aggregates and materials businesses in Ontario for $235 million in cash.
ATE provides roadbuilding infrastructure solutions throughout Ontario to the provincial government, municipalities, and private clients through a workforce of approximately 1,000 employees.
In 2022, ATE’s revenue represented approximately 7% of Aecon’s consolidated revenue as part of the Construction segment.
“Aecon’s efforts are increasingly focused on helping meet its clients’ sustainable infrastructure needs and harnessing the opportunities that are expected to come from the transition to a net zero economy through decarbonization,” said Jean-Louis Servranckx, president and chief executive officer, Aecon Group Inc. “This transaction is consistent with Aecon’s goal of targeting prudent balance sheet leverage and liquidity and also reduces the overall capital intensity of Aecon’s business.”
Upon closing of the sale, Aecon and GIP will enter into a strategic cooperation agreement for certain major projects and pursuits in Ontario that leverage both Aecon’s heavy civil construction services and GIP’s roadbuilding capabilities.
Upon closing, Aecon expects to use the net proceeds from the transaction to pay down debt on its revolving credit facility. Aecon plans to maintain a disciplined capital allocation approach focused on long-term shareholder value.