Sep 3 2014
Southwest Gas Corporation ("Company") announced today that through its subsidiaries, led principally by NPL Construction Co. ("NPL"), it has signed agreements to acquire several privately held, affiliated construction companies for approximately US$185 million in cash less assumed debt and subject to a working capital adjustment.
NPL, the Company's primary construction services subsidiary, has agreed to acquire the Link-Line Group of Companies which includes Link-Line Contractors Ltd., W.S. Nicholls Construction Inc., W.S. Nicholls Industries Inc., and a fifty percent equity interest in W.S. Nicholls Western Construction Ltd., all Canadian-based construction companies. In a related transaction, other affiliates of the Company have agreed to acquire certain assets and liabilities of Brigadier Pipelines Inc. ("Brigadier"), a US‑based affiliate of the Link-Line Group of Companies. The current owners will retain a small ownership percentage in the combined businesses.
The combination of NPL and Link-Line will create one of the largest natural gas distribution contractors in North America. W.S. Nicholls adds a diverse line of construction and fabrication services not presently offered by NPL in its existing markets. Similarly, Brigadier brings the potential for development of a midstream pipeline construction business. The Canadian target companies are expected to benefit from NPL's industry recognition, administrative platform, and access to capital.
"These acquisitions will expand NPL's customer base, geographic scope, and technical service offerings," said Jeffrey W. Shaw, Chief Executive Officer of the Company and Chairman of the Board of NPL. "We seek to grow NPL both organically and through strategic transactions. The news we're announcing today is consistent with that overall vision."
Subject to customary closing conditions, the acquisitions are expected to be completed during October 2014. For 2013, revenues and operating income were approximately US$250 million and US$16 million, respectively, for the Link-Line Group of Companies and Brigadier. Including one-time transaction and integration costs, the acquisitions are currently expected to be accretive to EPS in the first twelve months following the closing.
NPL plans to finance the purchase of the Link-Line Group of Companies with a new US$300 million secured revolving credit and term loan facility arranged and syndicated by Wells Fargo Securities, LLC and Bank of America Merrill Lynch.
FMI Capital Advisors, Inc. acted as NPL's financial advisor, and Norton Rose Fulbright acted as legal advisor to NPL and the Company on the transaction. A presentation on the pending acquisition is available in the Investor Relations section of the Company's website at www.swgas.com.
Link-Line Contractors Ltd. is a natural gas services contractor providing construction and maintenance services for the Canadian utility industry, with operations in Ontario, Canada. The W.S. Nicholls companies, with operations in British Columbia and Ontario, Canada, provide industrial construction solutions, fabrication, and civil services to the oil and gas, pulp and paper, and automotive industries, as well as government and private sector customers. Brigadier is a specialty midstream pipeline contractor, with operations in Pennsylvania. The Link-Line Group of Companies and Brigadier includes a combined workforce of over 1,100 employees.
NPL is an industry leader in utility infrastructure construction, specializing in natural gas and electric distribution across the United States. Founded in 1967, NPL has grown to a workforce in excess of 4,000 employees in more than 20 states from coast to coast.
Southwest Gas Corporation provides natural gas service to approximately 1.9 million customers in Arizona, Nevada, and California.
Source: http://www.swgas.com/