Stella-Jones Grows Into Electrical Transmission Steel Structures With the Acquisition of Locweld

Company Overview - Stella-Jones Inc. has announced the acquisition of Locweld Inc., a designer and manufacturer of lattice transmission towers and steel poles, with the deal expected to close today [1][3]. - Locweld, based in Candiac, Quebec, has over 75 years of experience and employs approximately 220 people [2]. Strategic Implications - The acquisition allows Stella-Jones to enter the approximately $5 billion steel transmission structure market, enhancing its current utility poles business and creating new growth opportunities [3]. - The CEO of Stella-Jones emphasized that this strategic move will leverage the company's extensive sales and distribution network to better serve customers and expand its market reach [3]. Financial Details - The acquisition price is set at$58 million on a cash-free, debt-free basis, with potential additional performance-based payments of up to $7 million contingent on achieving specific milestones [5]. - Stella-Jones plans to invest approximately$15 million in capital expenditures to increase Locweld's output and optimize operational efficiencies [5]. - Locweld reported sales of approximately $55 million for the year ending September 30, 2024 [5]. Management Transition - Following the acquisition, Michael Cyr, the CEO of Locweld, will step down, while key management members will remain to support the business [5].