ARE To Acquire Oaktree's Preferred Equity Investment In Its Utilities Platform

Research evidence excerpt

ARE To Acquire Oaktree's Preferred Equity Investment In Its Utilities Platform

Industrial Products

Aecon Group Inc.

TD SECURITIES INC. - CANADA ESTIMATE CHANGES

June 26, 2026

Price: C$43.76 (06/25/2026) ARE To Acquire Oaktree's Preferred Equity

Price Target: C$61.00 (Prior C$62.00) Investment In Its Utilities Platform

BUY (1)

ESG SCORE: 68/100

Michael Tupholme, CFA^ THE TD COWEN INSIGHT

416 307 9389

We view the transaction positively from a strategic perspective. The acquisition gives Aecon

michael.tupholme@tdsecurities.com

full ownership of its Utilities platform (exposure to high-growth end-markets). The deal also

Atharva Zaveri^ enhances integration across operating sectors, simplifies ARE's capital structure and is

416 983 9717 expected to be immediately EPS accretive. Further, the implied EV/TTM EBITDA multiple of

atharva.zaveri@tdsecurities.com

13.0x compares favorably vs. peers.

Key Data

Symbol TSX: ARE-T Event:

12-Month Div (Est.): C$0.77

Aecon announced an agreement to purchase the convertible preferred equity investment

12-Month Total

41.2%Return: held by funds managed by the Power Opportunities strategy of Oaktree Capital Management,

52-Week Range: C$56.85-C$18.75 L.P. in Aecon’s utility infrastructure subsidiary, Aecon Utilities (AU), for a transaction value of

Market Cap: C$3.1B $320mm. Closing expected in Q4/26.

Net Debt (MM): C$696.2

Impact: NEUTRAL for share price near term

Dil. Shares Out (MM): 71.5

Float Shares (mm): 68.5 Transaction Metrics: The transaction values AU (100% basis) at an implied equity value of ~

Float Cap ($mm): C$2,996 $1.2bln and an EV of ~$1.5bln (based on $320mm for Oaktree's as-converted 27.5% ownership

Net Debt/Total Cap: 39 % interest in AU). The purchase price implies an EV/TTM acquisition-related pro forma adj.