Construction services firm Carillion has acquired a 60% controlling stake in Canadian power company Rokstad.
The £33m deal, which may also see Carillion take full control of the firm in the future, is dependent on financial performance of the British Columbian firm which employs more than 600 people, providing transmission and distribution of power line services.
Carillion, which employs around 1,500 people in the North East, said the move was intended to grow its skills in the “rapidly expanding” electric power market.
Payment for the stake will be made over a series of instalments leading to July 2017, including an £11m portion this year.
The agreement means Carillion has also committed to acquire the remaining 40% 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.
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”.
In the 12 months to the end of June, Rokstad had revenues of £108.5m and pre-tax profit of £13.1m.
The firm’s net debt will be consolidated into Carillion’s balance sheet.