Wajax Announces Acquisition of Groupe Delom Inc.

TORONTO, Oct. 16, 2018 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced that it has acquired all of the issued and outstanding shares (the "Shares") of Montréal, Québec-based Groupe Delom Inc. ("Delom"). Pursuant to the terms of the share purchase agreement entered into between Wajax, Delom and Delom's direct and indirect shareholders, the aggregate purchase price for the Shares was $51.8 million, with $2.0 million of such purchase price remaining subject to the achievement of certain performance targets post-closing.

Founded in 1963, Delom specializes in the maintenance and repair of critical electromechanical and rotating equipment for continuous process industries. Serving customers in diverse end markets, including hydroelectric, wind and nuclear power generation, mining, pulp and paper, petrochemical, aluminum smelting, and rail and marine transportation, Delom has six branches across Eastern Canada and employs more than 350 people. 

Delom Transaction Highlights

• Consistent with Wajax strategy, the acquisition of Delom is expected to provide meaningful growth in the corporation's Engineered Repair Services (ERS) business;
   
• For the twelve months ended September 30, 2018, Delom had revenues of approximately $69.4 million and adjusted EBITDA of approximately $8.5 million(1); and
   
• The acquisition is expected to be immediately accretive to Wajax shareholders in an anticipated range of $0.10 – $0.15 for the 2019 financial year, on an earnings per share basis.

"We are extremely pleased to welcome Delom and its team of dedicated professionals to our company," said Mark Foote, President and Chief Executive Officer of Wajax. "The addition of Delom not only enhances our ERS service offering and value proposition to existing customers, it also satisfies each of the criteria we have outlined in our updated acquisition strategy, which includes enhanced EBITDA margins, advancement of our corporate strategy and scale to drive further growth."

Mario Montpetit, the President of Groupe Delom Inc., stated, "Joining Wajax provides our team with significant opportunities to grow our volume nationally, leveraging the Wajax branch network and extensive sales and marketing infrastructure. Combining Delom's electromechanical motor expertise with Wajax's hydraulics, process, bearings and power train capabilities offers customers a value proposition unique in the marketplace. As well, Wajax's commitment to its employees and customers is entirely aligned with the Delom philosophy and we're excited to be a part of the organization."

The transaction will be subject to normal post-closing adjustments.

Amendment and Extension of Senior Secured Credit Facilities

Wajax also today announced amendments to its senior secured credit facilities. Pursuant to such amendments, the aggregate commitments of the lenders under such facilities have been increased from $300 million to $400 million, and the maturity date has been extended from 2021 to 2023, representing a five year commitment from lenders. Following the amendments, Wajax continues to have ample capacity under its credit facilities to pursue organic growth initiatives and to fund strategic acquisitions while maintaining the stability of its dividend.

Wajax Corporation

Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified industrial products and services providers. The Corporation operates an integrated distribution system providing sales, parts and services to a broad range of customers in diverse sectors of the Canadian economy, including: construction, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities and oil and gas.

The Corporation's goal is to be Canada's leading industrial products and services provider, distinguished through its three core capabilities: sales force excellence, the breadth and efficiency of repair and maintenance operations, and the ability to work closely with existing and new vendor partners to constantly expand its product offering to customers. The Corporation believes that achieving excellence in these three areas will position it to create value for its customers, employees, vendors and shareholders.

Additional information, including Wajax's Annual Report, is available on SEDAR at www.sedar.com. 

CONTACT: Mark Foote, President and Chief Executive Officer, Email: mfoote@wajax.com; Darren Yaworsky, Chief Financial Officer, Email: dyaworsky@wajax.com; Trevor Carson, Vice President, Financial Planning and Risk Management, Email: tcarson@wajax.com, Telephone #: (905) 212-3300

Web Site: http://www.wajax.com