The deal includes an equity purchase price of $65.7 million — $58.1 million in cash and $7.6 million in common shares of Stuart Olson shares at a deemed price of $7.05 per share.
The Calgary-based construction and industrial contractor says the price could increase by a maximum of $25.8 million through earn-out payments over the next three years based on Studon's annual EBITDA meeting certain targets.
Studon, which employs between 500 and 1,000 electricians and instrumentation trades people at any given time, offers construction, maintenance and turnaround services to the oil and gas, pipeline and petrochemical industries in Western Canada.
Its management team will continue to lead the day-to-day operations of the business, while the company's results will be reported as part of Stuart Olson's Industrial Group.
"The acquisition of Studon is a critical step in our strategy to become an integrated, full-service construction company. In particular, it strengthens the vertical integration of our Industrial Group and supports our objective of growing this group into a self-performing general contractor," said Stuart Olson president and CEO David LeMay.
The transaction is expected to close no later than Jan. 25, subject to Competition Bureau and TSX approval.
On the Toronto Stock Exchange, Stuart Olson shares closed down eight cents at $7.38 on Wednesday.