Aecon Group has announced it will sell Aecon Transportation East in Ontario to Green Infrastructure Partners.
Through the purchase agreement, Green Infrastructure Partners will pay $235 million in cash for the roadbuilding, aggregates and materials businesses.
Aecon Transportation East provides roadbuilding infrastructure solutions throughout Ontario to the provincial government, municipalities and private clients through a workforce of about 1,000 employees.
In 2022, Aecon Transportation East’s revenue represented about 7 per cent of Aecon’s consolidated revenue as part of its 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 of 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 Green Infrastructure Partners 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 Green Infrastructure Partners’ roadbuilding capabilities.
Aecon plans to use the proceeds from the transaction to pay down debt on its revolving credit facility.
The board of directors for Aecon and Green Infrastructure Partners have each approved the transaction. Aecon Transportation East will continue to operate in the normal course pending closing of the sale transaction, which is expected in the first half of 2023 and is subject to customary adjustments and closing conditions.
Last year, Green Infrastructure Partners acquired Coco Paving and its affiliates. Coco had operations across Ontario, Quebec, Manitoba and Saskatchewan that include access to over 250 aggregate sites, 33 asphalt plants, eight concrete plants and one of Canada’s largest asphalt cement terminals.