Mullen Group says it has entered into an agreement to acquire the business and assets of AECOM's Canadian Industrial Services Division, which operates largely within Alberta’s heavy oil and oilsands regions.
The AECOM unit employs over 350 people and operates in excess of 250 pieces of specialized equipment including: pressure trucks, hydrovacs, vacuum trucks, combo units, flushby units, fluid hauling equipment and various other pieces of support equipment, Mullen said. These assets are to be consolidated and deployed through three of its business units: Cascade Energy Services, E-Can Oilfield Services and Heavy Crude Hauling. While the purchase price was not disclosed, the acquisition is expected to add approximately $70.0 million in annual revenue to Mullen Group.
“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,” CEO Murray Mullen said in a statement.
“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 labour markets.”
Analysts with GMP FirstEnergy said the acquisition is positive for Mullen Group.
“…It should improve financial results within the oilfield services segment, which has struggled in recent quarters due to the lack of large scale pipeline construction activity,” analyst Ian Gillies wrote in a research note on Monday. “We understand the majority of the efficiencies from the acquisition will come from facility rationalization.”