Vancouver, British Columbia--(Newsfile Corp. - June 25, 2013) - Investment firm MPartners has updated coverage on Enterprise Group (TSX: E). Following news that the company has closed a previously announced acquisition of Calgary Tunneling and Horizontal Augering, analyst Tom Varesh reiterated his buy recommendation and increased his 12-month target price from $1.30 to $2.05, a premium of 205% over the $0.67 price the day the report was issued.
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Enterprise Group, a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries, is focused primarily in utility & infrastructure construction and specialized equipment rental. The company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources, to support continued growth.
Enterprise became a Western Canadian leader in flameless heat technology in September 2012 with its acquisition of Artic Therm International and has now become a technological leader in underground infrastructure construction by the closing of Calgary Tunnelling & Horizontal Augering.
Enterprise Group acquired Calgary Tunneling and Horizontal Augering for a purchase price of $12 million, consisting of $10.5 million in cash, about $0.5 million of Enterprise shares valued at $0.68 per share, and $1 million vendor take-back financing to be paid back over 2 years.
Leonard Jaroszuk, President and CEO stated, "We are excited about the opportunity this acquisition gives us since it not only allows us to better serve our Western regional customers, but it also allows us to expand our footprint and provides us the opportunity to expand all operations in Western Alberta."
Tunnelling is a highly specialized segment of the construction industry and competition is limited. Some current projects include the Calgary Airport expansion and providing underground water lines to a major potash producer in Saskatchewan.
Analyst Tom Varesh stated, "With the acquisitions made by Enterprise Group over the last 12 months, we believe the company is well positioned to benefit from major pipeline expansion projects that are currently being contemplated. We believe the ability to package the services of all three business segments or two of the three business segments in bids for pipeline work will ultimately make for stronger bids….placing the company in a position of strength when pipeline contracts are awarded."
The shares are currently trading at $0.64, and with 70 million shares outstanding, the company is capitalized at $44.8 million, well below MPartners' target price of $2.05.
For more information, please visit the company's website www.EnterpriseGRP.ca or contact Leonard Jaroszuk at 780-418-4400 or email contact@EnterpriseGRP.ca.
Investor relations is handled by Daniel Boase at First Canadian Capital Corp, who can be reached at 416-742-5600 or by email DBoase@FirstCanadianCapital.com.
For more information about MPartners or to obtain the report on Enterprise Group, visit their website at www.mpartners.ca.
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