Wajax acquires Montreal-based Delom

Heavy equipment sold by Wajax is on display during one of the company's demo days.

Wajax Corporation has acquired the Montreal-based Groupe Delom for $51.8 million.

On Oct. 16, Wajax announced it has purchased all issued and outstanding shares of the company. The purchase price for the shares is $51.8 million, with $2 million of the total remaining subject to the achievement of certain performance targets After closing.

“We are extremely pleased to welcome Delom and its team of dedicated professionals to our company,” said Wajax President and CEO Mark Foote. “The addition of Delom not only enhances our ERS (Engineered Repair Services) service offering and value proposition to existing customers, it also satisfies each of the criteria we have outlined in our updated acquisition strategy, which includes enhanced EBITDA margins, advancement of our corporate strategy and scale to drive further growth.”

Founded in 1963, Delom specializes in the maintenance and repair of critical electromechanical and rotating equipment for continuous process industries. Serving customers in diverse end markets, including hydroelectric, wind and nuclear power generation, mining, pulp and paper, petrochemical, aluminum smelting and rail and marine transportation.

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Delom has six branches across Eastern Canada and employs more than 350 people.

“Joining Wajax provides our team with significant opportunities to grow our volume nationally, leveraging the Wajax branch network and extensive sales and marketing infrastructure. Combining Delom’s electromechanical motor expertise with Wajax’s hydraulics, process, bearings and power train capabilities offers customers a value proposition unique in the marketplace,” said Delom President Mario Montpetit. “As well, Wajax’s commitment to its employees and customers is entirely aligned with the Delom philosophy and we’re excited to be a part of the organization.”

For the previous 12 month period,  Delom had revenues of about $69.4 million. The acquisition is expected to be immediately accretive to Wajax shareholders in an anticipated range of $0.10 to $0.15 for the 2019 financial year, on an earnings per share basis.

The transaction will be subject to common post-closing adjustments.