ADF Group (OTCPK:ADFJ.F) M&A Announcement Transcript

Summary of ADF Group Inc. Conference Call on Groupe Lahr Acquisition Company and Industry - Company: ADF Group Inc. - Acquisition Target: Groupe Lahr - Industry: Machining, welding, and industrial mechanics, with a focus on the hydroelectric sector Core Points and Arguments - Acquisition Details: ADF Group Inc. finalized the acquisition of 100% of Groupe Lahr's shares on September 18, 2025, for a total consideration of $20.4 million, which includes $16.4 million in cash and $4 million in subordinate voting shares [4][6] - Financial Performance of Groupe Lahr: Groupe Lahr generated revenues of $80.9 million for the fiscal year ended December 31, 2024, and had an order backlog of $104.5 million as of July 31, 2025 [7] - Integration Process: ADF Group Inc. and Groupe Lahr's management teams have begun the integration process, with Lahr's results expected to be consolidated in ADF's financial statements starting October 31, 2025 [8] - Growth Expectations: ADF Group Inc. anticipates doubling Groupe Lahr's order backlog by the end of 2027, leveraging synergies and existing client relationships, particularly with Hydro-Québec [9][10] - Investment Plans: ADF plans to invest over $35 million in Lahr's fabrication plant over the next 24 months, including the construction of a new administrative building and a production area [12][11] - Operational Efficiencies: The investment aims to modernize equipment and increase fabrication capacity, which is expected to enhance operational efficiencies [11][12] Additional Important Information - Market Dynamics: The acquisition is timely due to significant investments in hydroelectric projects in Canada, with Hydro-Québec planning to invest over $35 billion by 2035 [9] - Client Diversification: Post-acquisition, ADF Group Inc. expects to diversify its client base, reducing reliance on a few major clients [20][22] - Margin Improvement: While specific margin forecasts were not provided, there is an expectation that Groupe Lahr's margins will improve due to capital investments and operational synergies [25][27] - Risk Management: ADF Group Inc. emphasizes a careful approach to risk management, which is expected to mitigate inherent risks associated with the acquisition and market conditions [16][14] This summary encapsulates the key points discussed during the conference call regarding ADF Group Inc.'s acquisition of Groupe Lahr, highlighting the strategic importance of the acquisition, expected growth, and operational improvements.