The transaction is subject to approval by the shareholders of PowerComm. The purchase price includes an initial payment of $24.2m in cash and a subsequent payment of up to $7.6m in cash based on actual EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve months ending March 31, 2010.
Powell will also assume certain liabilities of PowerComm including bank debt, accounts payable and obligations under capital leases. The purchase price for the transaction will be paid from Powell’s existing cash.
Patrick McDonald, CEO of Powell, said: “This is an excellent acquisition for Powell, giving us an electrical service and manufacturing presence in western Canada. It will also strengthen our strategic position in the electrical power products business by expanding the scope and geographic reach of our existing operations, both in service and as a supplier of engineered products and solutions.”
Incremental revenues from this acquisition are expected to range between $62m and $71m during the first 12 months of ownership.
