Construction

North American Construction Group Announces Transformative Acquisition of MacKellar, A Leading Private Australian Heavy Equipment Solution Provider

North American Construction Group Announces Transformative

North American Construction Group Ltd. (“NACG” or the “Company”) (TSX:NOA) today announced that it has entered into a definitive purchase and sale agreement to acquire (the “Transaction”) MacKellar Group (“MacKellar”) for an estimated $395 million (the “Consideration”). MacKellar Group, with its heavy construction equipment fleet, is an Australia-based provider of heavy earthworks solutions to the mining and civil sectors, with a strong reputation derived from decades of reliable performance. The Transaction will significantly expand NACG’s capability and allow the Company to serve a highly valuable and diversified base of customers globally.

The Transaction emerged through continued dialogue with MacKellar over the past two years, following NACG’s entry into Australia through the acquisition of DGI Trading Pty Limited in 2021. The acquisition of MacKellar is highly complementary to, and a natural strategic fit with, NACG given shared cultural alignment, focus on safety and operational similarities. MacKellar will continue to operate and execute on its growth strategy, while delivering on its commitment of service to all its customers and partners.

“NACG has built a strong relationship with MacKellar over the past two-plus years. Given the operational and cultural similarities that our companies share, this acquisition is a rare and attractive opportunity,” said Joe Lambert, Chief Executive Officer of NACG. “Over the years, we have worked extremely hard to be part of the solution to help lower the operating costs of our customers through safe, efficient operation and maintenance of our equipment fleet. We are excited about partnering with MacKellar to serve our expanded customer base with the same innovations at a time when commodity producers are striving to maximize production and efficiency. I want to welcome the MacKellar team to the NACG family. We are extremely proud to be sharing in what we believe will be a bright future together.”

“Joining NACG offers a significant opportunity for both companies to share best practices and execute on our growth strategy. Our shared culture, highly skilled maintenance and operations teams, and now global operations will position us as a leader in heavy equipment fleet, allowing us to better serve customers across Australia,” said Duncan MacKellar, Chairman of MacKellar Group.

Strategic Highlights

  • Combined Business with Significant Global Reach and Diversified Customer Base: MacKellar provides the opportunity to expand the Company’s geographic and operational presence in Australia, while adding a high-quality investment-grade customer base. The Transaction provides diversification with no single end market contributing more than approximately a third of adjusted EBIT.
  • Shared Core Values and Culture: MacKellar shares NACG’s values and is committed to hands-on management, continuous drive to be the low-cost provider, a focus on building strong partnerships with customers, and maintaining operating and safety excellence.
  • Turnkey Operations with Highly Valuable Asset Base: MacKellar Group adds approximately 450 mobile heavy equipment assets; 1,000 employees, including over 375 maintenance personnel; and 15 operating projects across a variety of service offerings including contract mining, civil earthworks, dry and maintained equipment rentals and component rebuilds. Its asset base is comprised of a well-maintained fleet operating at effective utilization levels.
  • Prudent Approach to the Transaction Minimizes Execution Risk: Continuous dialogue and in-person operational field reviews by both parties has allowed for the Company to ensure there is a strong cultural fit and alignment between the two organizations. This alignment is also reflected in the transaction structure with a significant portion of the consideration being deferred.
  • Robust Growth Prospects with Strong Backlog: Operations in Western Australia and Queensland serve as a growth pillar given the large and diverse resource markets combined with a mining friendly jurisdiction. The combined company is expected to have over $4.0 billion in contractual backlog by December 31, 2023 which will be the foundation to drive significant growth.

“The transaction represents a major milestone for NACG and adds significant scale to our business. Both NACG and MacKellar are leaders with strong reputation, culture and commitment to safety. This partnership will accelerate our combined growth and allow us to better serve our customers on a global scale,” said Martin Ferron, Chairman of the Board of NACG.

About NACG

North American Construction Group Ltd. is a premier provider of heavy civil construction and mining services in Canada, the U.S. and Australia. For 70 years, NACG has provided services to the mining, resource, and infrastructure construction markets.

About MacKellar Group

Established in 1966 based on humble family values MacKellar has earned an enviable reputation in the industry for performance and reliability. MacKellar specialize in heavy earthmoving equipment solutions and has a proud history of working on both mining and civil earthwork projects around Australia.

Spotlight

Spotlight

Related News