OKOTOKS, Alta. – The Mullen Group announced it has entered into a letter of intent to acquire the shares of Canadian Hydrovac Ltd. (CHL), as well as an agreement with AECOM to acquire the business and assets of the company’s Canadian industrial services division.
Based out of Sherwood Park, Alta., Canadian Hydrovac services midstream, pipeline, construction, and municipal sectors in Western Canada. The company has additional branches in B.C.’s Lower Mainland and in Saskatchewan.
“This acquisition is an excellent example of how our organization approaches acquisitions. Not only do we acquire an industry leader in a growth market, we now have a real opportunity to generate margin improvement from the synergies associated with combining the assets with our existing hydrovac and specialized combo units business in Western Canada, including those that we will acquire with the recently announced AECOM purchase,” said Murray K. Mullen, chairman and CEO of the Mullen Group. “I am very pleased that Dan Shemanchuk will continue to lead CHL. He has built a company based upon quality, customer service and safety by investing in first class operating equipment with a team of skilled and dedicated employees. Now with our balance sheet and strong market presence here in Western Canada I feel confident that the CHL team under Dan’s leadership will capitalize on many future opportunities.”
On June 11, the Mullen Group announced its agreement to acquire the business and assets of AECOM’s Canadian industrial services division (ISD), which operates largely within the heavy oil and oil sands regions in Alberta.
The company employs more than 350 people and has over 250 pieces of equipment, including pressure trucks, hydrovacs, vacuum trucks, combo units, fluid hauling equipment, and various others.
“This opportunity is a perfect synergistic fit in our organization given that the business and assets of AECOM ISD virtually overlap three of our business units in the production services division of our oilfield services segment,” said Mullen. “The fact that the services sector of the oil and natural gas industry in western Canada remains very competitive reinforces our belief that only those companies with the right cost structure and strong balance sheet will survive today’s challenging market conditions and be positioned to capitalize on future opportunities when growth returns to the oil and natural gas industry. With this acquisition not only do we grow and strengthen three of our business units, we add a quality work force, which is a real challenge for oilfield service companies in today’s environment of low unemployment and tight labor markets.”
The AECOM deal is expected to add around $70 million in annual revenue to the Mullen Group, and CHL, which will operate as a standalone business unit within Mullen’s oilfield services segment, is expected to garner approximately $25 million in revenue annually.
The AECOM transaction is anticipated to close June 25, while the Canadian Hydrovac acquisition July 1.