ADF Group (DRX) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition enables expansion and diversification into hydroelectric and heavy industry sectors, strengthening presence in large-scale Canadian infrastructure projects and renewable energy markets.

• LAR’s strong order backlog and robust project pipeline align with growth objectives and recurring revenue targets.

• Retention of key client certifications and LAR’s brand supports continuity with major clients like Hydro-Québec.

• The deal supports Canadian content growth and leverages market tailwinds in renewable energy infrastructure.

• Both entities share common values and expertise, targeting growth in consolidated revenues and shareholder value.

Financial terms and conditions

• Total purchase price of $20.4 million: $16.4 million in cash (including $1.4 million working capital adjustment) and $4 million in Subordinate Voting Shares.

• Transaction closed on September 18, 2025, with purchase price allocation to be finalized in October 2025 interim financials.

• Acquisition completed via a reverse vesting order, resulting in a debt-free balance sheet and exclusion of non-essential assets.

Synergies and expected cost savings

• Anticipated operational efficiencies from best practice sharing, equipment modernization, and plant expansion.

• Integration of production, bidding, and financial ERPs planned to maximize internal efficiencies.

• Terrebonne plant will support LAR by handling engineering and fabrication for certain projects, maximizing combined production capacity.

• Integration expected to double LAR's fabrication capacity and enhance supply chain efficiencies.

• LAR’s margin expected to improve post-investment and with synergies, though specific targets not disclosed.