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

Executive Summary

• ADF Group Inc. has entered into an agreement to acquire Groupe LAR Inc. and its subsidiaries, subject to approval by the Superior Court of Québec.
• The transaction is valued at $19 million, payable via $15 million in cash and the issuance of 449,944 subordinate voting shares (valued at $4 million).
• The acquisition targets the hydroelectricity and heavy industry sectors, adding $80.9 million in annual revenue and a $104.5 million order backlog to ADF’s portfolio.

Key Details

• Transaction Structure: Acquisition of Groupe LAR Inc. and certain subsidiaries via a reverse vesting order under the Companies' Creditors Arrangement Act (Canada).
• Purchase Price: Total consideration of $19 million, subject to working capital adjustments.
• Payment Terms:
  • $15 million in cash, funded by ADF’s available cash.
  • Issuance of 449,944 subordinate voting shares of ADF, representing $4 million based on the average closing price of ADF shares on the TSX over the 5 trading days preceding August 29, 2025.
• Target Financials (LAR Group):
  • Revenue: $80.9 million for the fiscal year ended December 31, 2024.
  • Order Backlog: $104.5 million as at July 31, 2025, expected to be realized before ADF’s fiscal year ending January 31, 2027.
• Strategic Rationale: Creation of synergies, positive contribution to net income, diversification of offerings amid U.S. tariff threats, and maintenance/growth of 200 jobs in the Saguenay-Lac-Saint-Jean region.
• Closing Conditions: Approval by the Superior Court of Québec (Commercial Division), satisfaction/waiver of customary closing conditions, and approval by the Toronto Stock Exchange.
• Timeline: Application for the reverse vesting order to be heard in the coming days; expected to close shortly after court approval.

Notable Quotes

• "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.