GDI Integrated Facility Services acquires ESC Automation

ESC highly regarded building system integrator in North America with a portfolio of services including the installation and maintenance of building automation systems, security systems, HVAC systems as well as newer technologies.

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GDI Integrated Facility Services Inc. on November 28 announced that it and its wholly-owned subsidiary Ainsworth Inc. have entered into an agreement to acquire ESC Automation Inc. along with its U.S. subsidiaries Delta Connects Inc. and New Patriot Energy Inc., all collectively known as ESC.

Per a GDI press release, "ESC is a leading and highly regarded building systems integrator in North America with an impressive portfolio of services including the installation and maintenance of building automation systems, security systems, HVAC systems as well as newer technologies including real time locating systems, building analytics and energy management systems. Headquartered in Vancouver, British Columbia, ESC has 12 locations across North America, more than 750 employees and over 10,000 successful installations for nearly 3,500 customers."

The acquisition was strategically made to considerably strengthen Ainsworth's building automation systems business across Canada and position it as a master systems integrator with the capability to install and service multiple types of building systems and related technologies. ESC's strength in building automation systems in Western Canada will complement Ainsworth's strong HVAC, mechanical and electrical platform in the region, while Ainsworth's considerable presence in Ontario and Eastern Canada will help to facilitate ESC's growth geographically.

"The combination of ESC and Ainsworth will create a premier building systems and multi-trade facility services provider in Canada, with more than 2,400 employees in every province across the country as well as in five U.S. states," commented Claude Bigras, president and CEO of GDI. "Together, we will be able to provide our clients with the most innovative and technologically advanced building system solutions along with the ability to maintain, repair and replace all of the systems and equipment in a facility. We will be a true one-stop shop for both today's and tomorrow's buildings."

Ainsworth expects to acquire ESC for a purchase price of approximately $73.5 million on a debt-free basis, subject to certain closing adjustments including working capital. The acquisition will be funded through GDI's existing credit facilities. ESC recorded approximately $143 million in revenue in the trailing-twelve month period ending July 31, 2019, and generated a pre-IFRS 16 adjusted EBITDA margin in excess of GDI's global target EBITDA margin during the period. At closing, GDI's total debt to EBITDA coverage ratio is expected to be approximately 3.0x on a proforma basis.

Raymond Rae, co-founder of ESC stated, "The dedication of our employees has enabled ESC to be recognized as a leader in our field, and we view the combination with GDI as an opportunity to enhance our value proposition to our clients. We are very excited about joining forces with Ainsworth as it represents the next step in ESC's strategic evolution."

The acquisition is subject to Competition Bureau approval, receipt of certain third-party consents as well as other customary closing conditions. Subject to obtaining such required regulatory approvals and clearances and the satisfaction or waiver of other closing conditions, it is anticipated that the acquisition of ESC will be completed in January 2020. Additional information on GDI can be found on its website at www.gdi.com

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