Armtec has set the wheels in motion to purchase Con-Force, a Calgary-based precast concrete maker, for $120 million.
Acquisition
Armtec has set the wheels in motion to purchase Con-Force, a Calgary-based precast concrete maker, for $120 million.
“Armtec’s acquisition of Con-Force is really a transformational transaction for our company and for our unit holders,” says Charles Phillips, Armtec president and chief executive officer (CEO).
In 2006, 38 per cent of Armtec’s revenues were generated in Western Canada, followed by Ontario at 31 per cent and Quebec at 19 per cent. The Atlantic region and international market each accounted for six per cent of its revenues.
“Armtec is now positioned for considerable expansion in infrastructure markets across North America,” says Phillips.
Con-Force makes precast and pre-stressed concrete components for a variety of structures, with three strategically placed manufacturing facilities in British Columbia, Alberta and Manitoba. Its products are used for both structural and architectural purposes and applied in bridge, traditional, architectural and marine projects.
Bridge work represented 47 per cent of Con-Force’s 2006 sales. Con-Force pioneered the use of precast/pre-stressed concrete in bridge construction throughout Western Canada. Con-Force has about 500 employees and generated $109.8 million in revenue for the 12 months ending July 31.
“This transaction is a very positive development for our customers, suppliers and employees,” says Ron Adams, Con-Force president and CEO. “Our strong market presence in Western Canada directly complements Armtec’s existing lines of business.”
Armtec is a leading manufacturer and marketer of drainage products and engineered solutions for infrastructure applications in a diverse cross-section of industries, including public infrastructure and private sector markets.
Armtec is Canada’s only national multi-material manufacturer specializing in corrugated high-density polyethylene pipe, corrugated steel pipe and related engineered products. Armtec also distributes a broad range of water control and geosynthetic products. Sixty-six per cent of its 2006 revenues were generated through its pipe products alone.
“Con-Force is an excellent fit with Armtec and we look forward to integrating their strong management team and utilizing their expertise to strengthen our presence in the fast-growing infrastructure markets in Western Canada,” adds Phillips. The purchase of Con-Force is a sign of how strong Canada’s economy currently is, says one chief economist. A company purchase can be as good for a targeted company, as it is for the purchaser, because it shows an investment in wanting to make it viable.
“When you have purchases like this it is a sign of a very dynamic economy,” says Alex Carrick, CanaData chief economist. “It is usually a really good sign.”
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