Press release from CNW Group
Bird Construction Inc. Acquires H.J. O'Connell
Wednesday, August 31, 2011
/Not for distribution to United States newswire services or for distribution in the United States/
LISTING: TORONTO STOCK EXCHANGE
TORONTO, Aug. 31, 2011 /CNW/ - Bird Construction Inc. ("Bird") (TSX: BDT) today announced that it has completed its acquisition (as previously announced on July 20, 2011) of all of the outstanding shares of H.J. O'Connell, Limited ("H.J. O'Connell"). The acquisition was completed through Bird's wholly-owned subsidiary, Bird Construction Company Limited. The total cost of the transaction is approximately $78.5 million.
Bird is funding the acquisition through $15.0 million of vendor take back notes, $30.6 million of equipment financing on the current H.J. O'Connell equipment fleet and the balance of approximately $32.9 million from existing working capital. The equipment financing is for a term of 5 years and split equally between fixed and variable interest rates. In addition, Bird has put in place credit agreements totaling $55.0 million with two major Canadian commercial banks to further support the working capital and ongoing operational requirements of Bird, including H.J. O'Connell, if necessary.
H.J. O'Connell has been a leader in the heavy construction, civil construction and contract surface mining sectors since 1931 with operations in Newfoundland & Labrador, Northern Quebec and Manitoba. There is no geographic market sector overlap between the current operations of Bird and H.J. O'Connell. Its diversified business includes expertise serving the mining, energy, industrial, and infrastructure construction markets, with specialization in northern and remote site related projects. Certain key members of H.J. O'Connell's executive and management teams will remain as employees and will assist Bird in the management of H.J. O'Connell's ongoing growing operations. H.J. O'Connell operates a large fleet of heavy civil and mining equipment in support of its construction and mining operations. The equipment and expertise in earthwork and surface mining that H.J. O'Connell brings will permit Bird to expand its civil industrial business into new scopes of work. As well, Bird's recognized expertise in industrial building construction creates excellent opportunities to expand the services offered to H.J. O'Connell's loyal customer base.
"The completion of this transaction marks a significant event in the growth of Bird," stated Tim Talbott, President and C.E.O. of Bird. "The opportunities that a combined Bird and H.J. O'Connell company will be able to pursue will enhance the financial results of Bird in the future. We look forward to working on exciting projects with the management and employees of H.J. O'Connell as they join the Bird organization."
Bird and H.J. O'Connell believe that the combination of the two firms will enhance the services that they will be able to offer certain of their clients. The respective strengths that each firm's qualified employees possess will allow both organizations to capitalize on the anticipated growth in the markets they serve. H.J. O'Connell's 600 craft and staff employees will join the current 700 Bird employees when the transaction is completed.
In addition to enhanced growth prospects for the combined business of the two companies resulting from these synergies, the acquisition will make a significant immediate contribution to Bird's earnings and cash flows. H.J. O'Connell's audited earnings for its year ended May 31, 2011 were $13.8 million.
For a synopsis of the transaction, please refer to Bird's website at www.bird.ca.
This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors, could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
For further information:
T.J. Talbott, President & C.E.O. or
S.R. Entwistle, C.F.O.
Bird Construction Inc.
5403 Eglinton Avenue West
Toronto, ON M9C 5K6
Phone: (416) 620-7122
Fax: (416) 620-1516