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Aecon makes deal $150 million with U.S. asset management company

TORONTO — Canadian construction firm Aecon Group Inc. announced a deal with United States-based asset management company Power Opportunities Strategy of Oaktree Capital Management, for an investment in Aecon Utilities Group Inc.

The deal will see the U.S. firm invest $150 million in the utility infrastructure group in exchange for 27.5 per cent ownership interest in the Aecon subsidiary. Aecon said the investment would show immediate benefits to both Aecon and Aecon Utilities. Aecon will maintain 72.5 per cent ownership of Aecon Utilities.

Aecon said it is hoping to leverage Oaktree’s track record in utilities and infrastructure investing as it seeks to rise more capital and grow its utilities group across Canada and expand into the U.S.

As part of the deal Aecon Utilities will have access to $400 million in revolving credit to help with future growth plans. The investment also gives the company a better financial position coming off a disappointing second quarter that saw its balance sheet dragged down by legacy projects and rising construction costs.

“This strategic Investment will accelerate growth in Aecon Utilities, further strengthen Aecon’s balance sheet to take advantage of growth and concession opportunities and unlock value for our shareholders,” said Jean-Louis Servranckx, President and CEO of Aecon.

The deal will also give Oaktree two seats on the six-person board of directors for Aecon Utilities.

Aecon Utilities provides utility infrastructure solutions in Canada for four end-markets, including electrical transmission and distribution, renewables and in-home services, telecommunications, and pipeline distribution.