Oaktree Capital Invests $150M in Aecon Utilities

Credit specialist Oaktree Capital Management, through funds managed by its Power Opportunities strategy, has made a $150 million convertible preferred equity investment in Aecon Utilities, a Canadian construction and infrastructure development company and subsidiary of Aecon Group.

Prior to conversion, the preferred equity will accrue a 12% annual coupon for the first three years and a 14% annual coupon thereafter. The equity is convertible at any time by Oaktree, giving the firm 27.5% ownership of Aecon.

The conversion value implies a $750 million enterprise value for Aecon Utilities, representing a trailing 12-month adjusted EBITDA multiple of 9.3x.

Oaktree will also give the utilities business a standalone committed revolving $400 million credit facility. Aecon will have a separate committed revolving credit facility of $450 million to replace its prior $600 million facility following the closing of the investment.

Aecon provides utility infrastructure solutions across electrical transmission and distribution, renewables and in-home services, telecommunications and pipeline distribution.

Majority-owned by Brookfield Asset Management, Oaktree manages $179 billion in assets.