Stuart Olson acquires Studon Electric & Controls of Red Deer

CALGARY, ALTA.—Stuart Olson Inc. has completed the acquisition of Studon Electric & Controls Inc., which is a Red Deer, Alberta-based electrical and instrumentation services company.

"The completion of the Studon acquisition is a critical step in our strategy to becoming an integrated full-service construction company," said David LeMay, president and chief executive officer of Stuart Olson.

"In particular, it strengthens the vertical integration of our Industrial Group, supports our objective of growing this group into a self-performing general contractor and greatly enhances our ability to service the maintenance, repair and operations sector."

The purchase price of $77.8 million consists of an equity purchase price of $67.7 million, plus the assumption of net debt and a working capital adjustment.

The equity purchase price consists of $59.9 million in cash and $7.8 million in common shares. Studon is a provider of non-union construction, maintenance and turnaround services to the oil and gas, pipeline and petrochemical industries in Western Canada.

The company employs between 500 and 1,000 skilled electricians and instrumentation trades people at any given time. For the 12-month period ending Nov. 30, 2014, Studon was expected to generate revenue of about $151.5 million.

The transaction is consistent with Stuart Olson’s expansion strategy and provides a platform for the growth of the Industrial Group. Studon’s operations are concentrated in the oil sands and steam assisted gravity drainage markets.

The company wants to take advantage of opportunities to cross-sell and bundle services with existing clients. Other future growth opportunities for the business include:

— continued investment in the oil sands, particularly in the in-situ sub-sector;

— continued build-out of pipeline systems in Western Canada needed to reduce capacity constraints;

— and conversion of new construction projects into long-term maintenance contracts.

Stuart Olson provides building construction, commercial and industrial electrical contracting, and industrial insulation services to clients in B.C., Alberta, Saskatchewan, Manitoba and Ontario.