Infrastructure and Energy Alternatives to acquire William Charles Construction
Infrastructure and Energy Alternatives announced that it has signed a definitive agreement to acquire William Charles Construction Group, including Ragnar Benson, a leader in engineering and construction solutions for the rail and heavy civil industries. This transformative acquisition will create a national, market-leading platform in the attractive rail industry, broaden IEA's exposure in the heavy and light civil infrastructure and environmental remediation spaces and expand IEA's geographic footprint through the Southern and Western United States. Under the terms of the agreement, IEA will purchase William Charles for approximately $90 million, including $85 million in cash and $5 million in equity, which equates to a 4.5x multiple of William Charles' pro forma Adjusted EBITDA for the last twelve months ended May 30, 2018 before the realization of any synergy-related cost savings. The Company anticipates an additional approximately $5 million in cost savings over the first 18 months post-close through the integration of financial, insurance and IT systems. Based on year-to-date figures as of May 2018, William Charles is expected to add approximately $520 million in backlog, $300 million to $330 million in revenue and $18 million to $22 million in Adjusted EBITDA. The year-to-date pro forma adjustments to EBITDA include $5.2 million for the anticipated conversion of William Charles' operating leases to capital leases and $3 million to remove corporate overhead costs that will not continue post-closing. The cash portion of the purchase price and related fees and expenses will be financed through a $75 million delayed-draw term loan facility as well as cash on the balance sheet. The acquisition has been unanimously approved by both companies' Boards of Directors and is anticipated to close in the fourth quarter of 2018, subject to customary closing conditions.