ClearStream Closes Acquisitions of Former AECOM Production Services Assets.
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2 July 2019 - Canada-based ClearStream Energy Services Inc.'s (TSX: CSM) ClearStream Energy Holdings LP subsidiary has closed the acquisition of certain assets of the production services division formerly operated by AECOM Production Services Ltd. and certain of its affiliates, the company said.
The AECOM Transaction was completed for an aggregate purchase price of approximately CDN 42m (USD 32.06) comprised of CDN 18.2m for the assets and approximately CDN 23.8m for the working capital.
Concurrent with the closing of the AECOM Transaction, CEHLP also completed its previously announced acquisition of all of the issued and outstanding shares of Universal Weld Overlays Inc. for a purchase price of approximately CDN 12m, subject to deferred consideration and earn-out adjustments for an aggregate purchase price of up to CDN 15.3m.
ClearStream financed the transactions through a combination of equity financings of series 2 cumulative redeemable convertible preferred shares issued on a prospectus exempt basis to Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts that it manages for aggregate gross proceeds of CDN 32.2m and, with respect to the AECOM transaction, a new debt facility in the amount of CDN 19m from the Business Development Bank of Canada and a portion of the proceeds of new term loans made available to CEHLP pursuant to a New Credit Agreement.
The Production Services Business operates in the mechanical services and electrical and instrumentation services sectors across Alberta. These services include the full project life cycle of construction and maintenance services such as: civil, fabrication and modularization, mechanical installations, facility construction, pipelining, electrical, instrumentation, high voltage and maintenance services.
This business serves some of the largest upstream, midstream and downstream operators in Canada. The Production Services Business was established when Flint Energy Services was formed in 1998 and has been successfully operating in Western Canada for the last 21 years. AECOM acquired the Production Services Business in 2014.
As part of the AECOM transaction, ClearStream has acquired certain assets and real estate properties of the Production Services Business located throughout Alberta in Grande Prairie, Whitecourt, Red Deer, Olds, Sherwood Park and Strathmore, in addition to the rights to the Flint brand in Canada.
In connection with the AECOM Transaction, ClearStream has hired a substantive portion of the workforce from the Production Services Business, in accordance with the terms and conditions of the Asset Purchase Agreement.
Beginning on July 2, 2019, the ClearStream Energy Services LP division will be combined with the acquired Production Services Business locations and will be marketed as Flint, a division of ClearStream.
UWO is a specialty weld overlay fabricator that provides its customers with protection of pre-fabricated components for service in corrosive and erosive environments, and serves the following industries: oil and gas, pulp and paper, petrochemical, power, pipeline, mining, subsea, aerospace, and pressure vessel fabrication.
UWO operates from Airdrie, Alberta and has been serving some of the largest upstream, midstream and downstream customers in Canada and the United States for the last 23 years.
The transactions are expected to complement existing service lines in addition to adding new service lines to further broaden ClearStream's business opportunities. Combined, the transactions are expected to significantly expand ClearStream's operations, adding over CDN 140m of revenue and CDN 12m of earnings before interest, taxes, depreciation and amortization (EBITDA) on a trailing twelve-month basis.
ClearStream provides solutions to the energy and industrial markets. With offices strategically located across Canada and over 3,000 employees, we provide maintenance, construction and environmental services that keep our clients moving forward.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Jul 2, 2019|
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