Enterprise Group Inc. Finalizes Purchase of Calgary Tunnelling & Horizontal Augering
Jun 20, 2013
Enterprise Group Inc. (TSX:E) has announced that it has completed its acquisition of a specialized underground infrastructure construction company, Calgary Tunnelling & Horizontal Augering Ltd., for $12 million plus working capital, subject to post-closing adjustment. The acquisition is effective May 1, 2013.
Founded in 1984, Calgary Tunnelling & Horizontal Augering Ltd. (CTHA) is a North American leader in the highly specialized tunneling field. CTHA uses a number of tunneling disciplines, including laser guided boring and augering, pipe ramming, pipe jacking/tunnel boring (TBM), among others. The previous owner/manager has agreed to a long-term employment agreement and by retaining him and his expert team it will assist Enterprise to effectively integrate and invest into strategic growth initiatives. Enterprise president and CEO Leonard Jaroszuk said, CTHA has the potential for substantial growth over the next few years we are extremely excited to work with this tremendously skilled group.
CTHA performs its services from the West Coast through to central Canada across the energy, utility and infrastructure segments. Its clients range from Canada's largest rail companies and premier utility providers to leading infrastructure contractors and some of North America's largest pipeline companies. CTHA's revenue stream is well diversified between all of these segments.
Current infrastructure projects include a series of technically difficult tunnels being constructed at the massive $600 million Calgary International Airport expansion, while other crews are completing several large diameter utility crossings under the Trans Canada highway near Banff National Park. In Saskatchewan, crews are currently working to bring in underground water lines to one of Canada's largest Potash producers.
The three- to five-year outlook for pipeline construction is especially intriguing. CTHA is a leader in underground tunneling for large diameter pipelines. Among several ongoing projects CTHA is engaged in a three-year, long distance pipeline project which is in its first year of construction. CTHA provides underground tunneling at several crossings which cannot be open-cut, such as road, highway and rail crossings. In 2008, the Kinder Morgan Anchor Loop was put into service. CTHA was selected to perform the tunneling through the extremely difficult terrain of Jasper National Park in the Canadian Rockies. Pipeline projects like these all require the specialized services that CTHA provides. The current roster of proposed long distance pipelines is at a historic high and Enterprise believes that the Company is extremely well positioned to benefit from this boom in pipeline construction.