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ADF GROUP INC. PROVIDES AN UPDATE FOLLOWING THE ACQUISITION OF LAR GROUP INC
ADF GROUP INC. PROVIDES AN UPDATE FOLLOWING THE ACQUISITION OF LAR GROUP
About this update from Adf Group Inc.
TERREBONNE - ADF GROUP INC. ('ADF' or the 'Corporation') (TSX: DRX), completed the acquisition of LAR Group Inc. ('LAR') on September 18, 2025 (the 'Transaction'). The consideration paid by ADF in connection with the Transaction consists of a purchase price of $20.4 million , including a closing adjustment related to certain working capital expenses, paid as follows: (i) a cash amount of $16.4 million , including the $1.4 million closing adjustment, and (ii) the issuance of 449,944 subordinate voting shares of the Company, representing the equivalent of $4 million in subordinate voting shares of the Company based on the average closing price of the Company's shares on the Toronto Stock Exchange during the 5 trading days preceding August 29, 2025 . ADF paid the consideration in cash from its cash on hand. Founded in 1942 and based in Metabetchouan in the Saguenay-Lac-Saint-Jean region of Quebec , LAR is active in the fields of machining, welding and industrial mechanics. LAR is a Canadian leader in the design, fabrication and installation of mechanically welded steel structures. Primarily focused on the rapidly expanding large-scale hydropower market, the company also offers tailor-made overhead crane solutions for heavy industry. LAR generated revenue of $80.9 million in its fiscal year ended December 31, 2024 and had an order backlog (1) of $104.5 million as at July 31, 2025 , which is expected to be achieved gradually by the end of ADF's fiscal year ending January 31, 2027 . Markets and anticipated backlog growth Now that the acquisition has been finalized, ADF and LAR plan to implement a growth plan supported by the various upcoming pan-Canadian hydroelectric development projects. In Quebec alone, Hydro-Quebec plans to invest amounts in excess of $35 billion (2) hydroelectric dam renovation projects and construction of new projects by 2035. Major projects are also planned in Ontario , British Columbia and the Atlantic provinces. At the same time, and in response to U.S. tariff threats, we expect Canadian book owners to prioritize local purchases, which should favour a key Canadian player in the hydropower sector like LAR. In light of this economic outlook and taking advantage of the expected operational synergies between ADF and LAR, the Company aims to double LAR's backlog, which stood at $104.5 million as at July 31, 2025 , by January 31, 2027 . Capital investment In order to support the anticipated growth, significant investments will have to be made at LAR's manufacturing plant, located in Metabetchouan , Saguenay-Lac Saint-Jean, Quebec . ADF and LAR will not only have to increase manufacturing capacity, but will also have to modernize equipment. With its extensive experience and recognized for its operational excellence, LAR will benefit from these investments, which should generate operational efficiencies reflecting ADF's approach to maintaining leadership in equipment and work methods. Subject to the approval of its Board of Directors, ADF plans to invest more than $35 million over the next 24 months in LAR's main plant in Saguenay-Lac-St-Jean. ADF expects to begin construction of the new buildings in April 2026 in order to be able to receive the new equipment by December 2026 . In parallel with these investments, and in order to support this anticipated growth, the Company expects to increase the number of employees at LAR's Metabetchouan plant, which is currently 200 employees. 'As we have already mentioned, we are convinced that this transaction will create significant synergies between ADF and LAR, will make a positive contribution to ADF's net results and will diversify ADF's offering in the face of U.S. tariff threats, while preserving and even growing 200 well-paying jobs in the greater Saguenay-Lac-St-Jean region,' said Jean Paschini , Chairman of the Board of Directors and Chief Executive Officer of the Company. 'The two companies share common values and we intend to leverage our experience and expertise to benefit not only from operational synergies, but also to grow consolidated revenues and results for the benefit of our shareholders,' concluded Mr. Paschini . Conference call with investors A conference call with investors will be held today, October 29, 2025 at 10 a.m. ( Montreal time) to discuss the acquisition of LAR Group . This conference call will be held in English. However, financial analysts will be able to ask their questions in French during the question and answer session that will follow the presentation by ADF's management. To join the conference call without operator assistance, you can sign up with your phone number on https://emportal.ink/3WeWncg to receive an instant automatic callback. You can also join the call through an operator by dialing 1-800-990-4777 a few minutes before the scheduled start time of the conference call. A replay of the recording of this call will be available from 1 p.m. on October 29, 2025 until November 5, 2025 , by dialing 1-888-660-6345; followed by access code 93016. The conference call (audio) and a copy of the Company's presentation will also be available at www.adfgroup.com. Members of the media are invited to join in listening mode. About ADF Group Inc. | ADF Group Inc. is a North American leader in connection design and engineering, manufacturing, including the application of industrial coatings, the erection of complex steel structures, heavy steel components, as well as wrought and architectural metals, for the non-residential infrastructure sector. ADF Group Inc. is one of the few players in the industry capable of carrying out commercial, institutional, industrial and public megaprojects characterized by a very high level of technological complexity and accelerated timelines. The Company now operates two manufacturing plants and two paint shops; in Canada and the United States , as well as a Construction division in the United States , which specializes in the assembly of structural steel and other related products. The Company also operates a manufacturing plant in Quebec specializing in machining, welding and industrial mechanics, through its division, LAR Group Inc. , a Canadian leader in the design, manufacture and installation of mechanically welded steel structures. Forward-Looking Statements | This press release contains forward-looking statements that reflect ADF's objectives and expectations. These statements are identified by verbs such as 'expects', 'expects' or 'anticipates' as well as the use of future and conditional verb tenses. By their nature, these statements involve risks and uncertainties. As a result, actual facts may differ from ADF's expectations. Forward-looking information includes, but is not limited to, statements regarding the Transaction, including the effects and benefits of the Transaction, as well as objectives relating to the increase of LAR's backlog, LAR's contribution to the Company's net results and growth in the Company's consolidated revenues and results, and the Company's expectations regarding the increase in LAR's workforce, the potential efficiencies associated with the proposed capital investment, the estimated amounts and timing of the capital investment for LAR's manufacturing facility, and the start date of construction and equipment acceptance at LAR's manufacturing facility. These forward-looking statements are provided for the purpose of assisting the reader in understanding the Company's current expectations and plans with respect to LAR and may not be appropriate for other purposes. Forward-looking statements are based on assumptions and management's best possible assessment of future events, including the economic outlook and expected operational synergies between ADF and LAR, and are subject to risks, uncertainties and other important factors that may cause the Company's actual results to differ materially from those expressed or expressed in the Company's statements. implicitly by these statements. These factors are described under the headings 'Current Economic Environment' and 'External Factors Affecting the Company's Performance' in the Management's Discussion and Analysis of the Company's Financial Position and Results of Operations for the year ended January 31, 2025 . Readers are cautioned that this list of factors is not exhaustive and should not place undue reliance on forward-looking statements. Accordingly, the reader is cautioned that actual results may differ materially from those anticipated. Except as required by applicable securities laws, the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-IFRS and Other Financial Measures | Are measures derived primarily from the consolidated financial statements but are not standardized financial measures under the financial reporting framework used to prepare the Company's financial statements. Accordingly, readers should caution not confusing or substituting for IFRS performance measures. In addition, the insurer should avoid comparing these non-IFRS measures to similarly named measures provided or used by other issuers. The definition of these indicators and their reconciliation to comparable measures in International Financial Reporting Standards issued by the International Accounting Standards Board ('IFRS Accounting Standards') is as follows: Order book The order book is a measure used to assess the future level of products (revenues). The backlog includes firm orders obtained by LAR Group , either through a firm contract or an official notice to proceed confirmed by the customer. The order book therefore includes the non-manufactured portion of the contracts thus confirmed. Contact: Jean Paschini Tel: (450) 965-1911 Web: www.adfgroup.com (C) 2025 Electronic News Publishing, source ENP Newswire