Carillion agrees to acquire leading Canadian power transmission and distribution services business
Integrated support services company, Carillion plc, has agreed to acquire a 60 per cent interest in the trade and assets of Rokstad Power Corporation ("Rokstad'). This will significantly enhance Carillion's skills and prospects for growth in servicing the rapidly expanding electric power transmission and distribution market.
Rokstad, which is based in British Columbia, Canada, provides a full range of transmission and distribution power line services, including specialist live line operations, and has expanded its operations in strategic locations primarily across Canada. With over 600 employees and an extensive fleet of specialist equipment, Rokstad is well positioned to meet the growing demand for electricity and the need to rebuild ageing electric power infrastructure.
Rokstad is a family owned company, which has been led very successfully by Chief Executive Aaron Rokstad and President Bernie Rokstad, who will continue to lead the business following this acquisition.
The total cash consideration for this acquisition of up to £33 million is dependent on the financial performance of Rokstad. The consideration will be paid in instalments over the period to July 2017, with payments of £11 million and £10 million in 2014 and 2015, respectively. The instalments to be paid in 2016 and 2017, which are dependent on financial performance, will be capped at a combined total of £12 million. Under the acquisition agreement, Carillion has also committed to acquire the remaining 40 per cent interest in Rokstad after five years at a multiple of 4.5 times Rokstad's 2019 EBITDA, capped at a maximum additional consideration of £42 million.
At the transaction date, Rokstad had gross assets of £47.9 million. In the 12 month period to 30 June 2014, Rokstad had revenue of £108.5 million and pre-tax profit of £13.1 million. Given Carillion will have a 60 per cent interest in Rokstad, 100 per cent, or some £21 million, of Rokstad's net debt will be consolidated into Carillion's balance sheet.
Commenting, Carillion Chief Executive, Richard Howson, said: ''Acquiring this interest in The Rokstad Group is an important strategic step in the development of our transmission and distribution business. The Rokstad Group has a successful track record in delivering high-quality services to a portfolio of blue chip major utility customers including BC Hydro, SaskPower, AltaLink, Fortis AB, National Grid & Iberdrola and private companies such as SNC Lavalin, Rogers and Imperial Metals.
"Rokstad's knowledge, skills and culture complement our own. This acquisition will therefore create significant new opportunities for us to grow our transmission business and capitalise on the unprecedented pipeline of work in the power transmission and distribution markets through extending our offering to new and existing customers. We look forward to working with the Rokstad senior management team and to an exciting future as we build on Rokstad's success".