Aecon Group’s Buy-out is an instant 22% Gain!

Back in May I wrote a review on Aecon Group, and recommended it as a buy. Following my own advice, since then I have been purchasing shares on dips in both my TFSA and corporate accounts. It seems that I wasn’t the only one that thought Aecon was under valued, and a worthy investment, because CCCC International Holding Limited (CCCI) has offered to purchase Aecon Group at a price of C$20.37/share!

From the Aecon Group press release:

  • All-cash consideration of $20.37 per share; 42 per cent premium to unaffected share price
  • Aecon gains access to new platforms and partnerships for continued growth in Canada and abroad; CCCI advances its global growth strategy
  • New growth and employment opportunities expected as Aecon gains significant capabilities and financial strength by joining the world’s largest network of engineering and construction companies
  • Aecon will retain its name, continue to be Canada-headquartered and led by its Canadian management team
  • Aecon and CCCI share a strong commitment to maintaining customer service excellence and a safety-first culture
  • Aecon board of directors unanimously recommends transaction to shareholders

This is great news for me. My adjusted cost basis is $16.67, and with an offering price of $20.37 that nets me a healthy 22.20% gain!

I had originally purchased Aecon for its strong dividend growth—21% compounded annually since 2007—and great underlying fundamentals, and I will be sad to see a solid dividend payer go away. However, given the capital gains attached to the sale, this is a great win. What makes things even better is that half of my holdings are in my TFSA, which means that the 22.20% gain is tax-free.

All in all, a great way to end October; this was certainly a treat!



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