Aecon Group could court global suitors

Canada’s construction industry may soon have a better idea of how attractive it is to the increasingly globalized building sector as one of its biggest catches sits on the auction block awaiting bidders.

Toronto-based Aecon Group Inc. is in the process of courting suitors after it put it itself up for sale Aug. 25, a move analysts say will draw players across Europe, the U.S. and China looking to size up the company’s — and Canada’s — potential.

In its 140-year history, Aecon has been involved in landmark construction and engineering projects, including the CN Tower, Vancouver’s SkyTrain and the Halifax Shipyard. It currently has major contracts for Toronto transit and nuclear refurbishment, among others.

However, analysts say its value has taken a major hit from the drop off of energy and mining projects due to a commodities downturn in recent years. Aecon’s share price has plunged 23 per cent in the past year alone to hover around $14 just before it announced it was weighing its options.

“The Canadian construction sector is for sale right now, it’s pretty cheap,” said Frederic Bastien, an analyst at Raymond James.

Bastien said there’s only a handful of companies globally that could make a serious bid for the company and that it would likely cost at least $1.5 billion to take it over. Interested parties could include Spain’s ACS Group, U.S.-based AECOM and Italian firms Astaldi and Salini, he suggested.

However, he added, any firms looking to bid on Aecon will be making a bet on a recovery in the resource sectors, as well as banking on an increase in government infrastructure spending.

“You have to believe that the natural resources sector will pick up, you have to be attracted, obviously, to the infrastructure spending.”