ADF GROUP INC. ENTERS INTO AN AGREEMENT TO ACQUIRE GROUPE LAR INC.

ADF GROUP INC. ENTERS INTO AN AGREEMENT TO ACQUIRE GROUPE LAR INC.

All amounts are in Canadian dollars unless specified otherwise.

TERREBONNE, QC, Sept. 2, 2025 /CNW/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), a North American leader in the fabrication of steel superstructures, is pleased to announce that it has entered into an agreement (the "Agreement") to acquire (the "Transaction") Groupe LAR inc. and certain of its subsidiaries (collectively, the "LAR Group"), subject to, among other things, approval by the Superior Court of Québec (Commercial Division) (the "Court").

Established in 1942 and based in Métabetchouan in the Saguenay-Lac-Saint-Jean region, in Quebec, the LAR Group operates in the machining, welding, and industrial mechanics sectors. The LAR Group is a Canadian leader in the design, manufacture and installation of mechanically welded steel structures. Primarily focused on the rapidly expanding large-scale hydroelectricity market, the LAR Group also offers customized overhead crane solutions for the heavy industry. The LAR Group generated $80.9 million in revenue for the fiscal year ended December 31, 2024, and had an order backlog ⁽¹⁾ of $104.5 million as at July 31, 2025, which should be progressively realized before the end of ADF's fiscal year ending January 31, 2027.

"We truly believe that this transaction will create significant synergies between our two groups, will have a positive contribution to ADF's net income and will diversify ADF's offering in the context of U.S. tariff threats, while allowing to maintain 200 well-paying jobs in the greater Saguenay-Lac-Saint-Jean region, and even grow this number," said Jean Paschini, Chair of the Board of Directors and Chief Executive Officer of the Corporation.

The consideration payable by ADF for the Transaction consists of a purchase price of $19 million, plus a closing adjustment linked to certain working capital expenses, payable as follows: (i) $15 million in cash, plus the closing adjustment, and (ii) the issuance of 449,944 subordinate voting shares of the Corporation, representing the equivalent of $4 million in subordinate voting shares of the Corporation based on the average closing price of the Corporation's shares on the Toronto Stock Exchange during the 5 trading days preceding August 29, 2025. ADF will pay the cash consideration using its available cash.

The Transaction is to be completed by way of a reverse vesting order to be sought from the Court in connection with LAR Group's restructuring proceedings, which proceedings will be initiated today pursuant to the Companies' Creditors Arrangement Act (Canada) and conducted under the supervision of the Court and a monitor to be appointed by the Court. The Agreement and the transactions contemplated therein will need to be approved by the reverse vesting order.

The LAR Group will apply to the Court for the reverse vesting order, and expects that such application will be heard in the coming days. The Transaction is expected to close shortly after approval by the Court, subject to the satisfaction or waiver, as applicable, of the other closing conditions customary for transactions of this nature, including approval by the Toronto Stock Exchange. 

About ADF Group Inc. | ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication, including the application of industrial coatings, and installation of complex steel structures, heavy steel built ups, as well as in miscellaneous and architectural metals for the non-residential infrastructure sector. ADF Group Inc. is one of the few players in the industry capable of handling highly technically complex megaprojects on fast-track schedules in the commercial, institutional, industrial and public sectors. The Corporation operates two fabrication plants and two paint shops, in Canada and in the United States, and a Construction Division in the United States, which specializes in the installation of steel structures and other related products.

Forward-Looking Information | This press release contains forward-looking statements reflecting ADF's objectives and expectations. These statements are identified by the use of verbs such as "expect" as well as by the use of future or conditional tenses. By their very nature, these types of statements involve risks and uncertainty. Consequently, reality may differ from ADF's expectations. Forward-looking information includes, but is not limited to, statements about the Transaction, including the expected timing thereof, the receipt of the required approvals, including approval by the Court and the Toronto Stock Exchange, as well as the anticipated impact and benefits of the Transaction. Forward-looking statements are based on assumptions and on management's best possible evaluation of future events and are subject to risks, uncertainties and other important factors that could cause the Corporation's actual performance to differ materially from expected results expressed in or implied by such statements. Such factors include, but are not limited to, the possibility that the Transaction will not be completed on the terms and conditions, or on the timing currently contemplated, and that it may not be completed at all, due to a failure to satisfy, in a timely manner or otherwise, the closing conditions of the Transaction or for any other reason, as well as the other factors set out under the "Current Economic Environment" and "External Factors to which the Corporation's Performance is Exposed" sections of the MD&A Report of the Financial Position and Operating Results of the Corporation for the fiscal year ended January 31, 2025. Readers are cautioned that the foregoing list of factors is not exhaustive and undue reliance should not be placed on forward-looking statements. As a result, readers are advised that actual results may differ materially from expected results. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Non-IFRS Financial Measures and Other Financial Measures | The order backlog is a measure used by the Corporation to assess future revenue levels. The order backlog includes firm orders obtained, either through a firm contract or a formal notice to proceed confirmed by the client. The order backlog therefore includes the portion of confirmed contracts that have not been put into production. The order backlog is an additional financial measure that is not standardized under the financial reporting framework used to prepare the Corporation's financial statements. Therefore, readers should be careful not to confuse or substitute it with performance measures prepared in accordance with IFRS. In addition, readers should avoid comparing this measure to similarly titled measures provided or used by other issuers.

Website: www.adfgroup.com

SOURCE ADF Group Inc.