North American Construction Group Strengthens its Presence in Western Australia with the Acquisition of Iron Mine Contracting, a Diversified Mining Services Contractor

Rhea-AI Summary

North American Construction Group (TSX: NOA / NYSE: NOA) agreed to acquire Western Australian mining services contractor Iron Mine Contracting for approximately $115 million (CAD) with an expected close in Q1 2026. The deal values IMC at ~2.5x expected 2026 EBITDA and is forecast to be ~20% accretive to incremental EPS in 2026. IMC brings a >$1.0 billion order book, a three-year lithium contract, and expands Western Australia exposure from 5% to 15% of earnings. Pro forma backlog rises to $4.3 billion. Funding: 65% senior bank financing, 35% vendor debt, $40M upfront from the revolver, $35M assumed equipment financing, and $40M deferred/earn-out over four years.

Positive

• $115M acquisition values IMC at 2.5x expected 2026 EBITDA
• Transaction expected to be ~20% accretive to incremental EPS in 2026
• IMC order book exceeds $1.0 billion, including a three-year lithium contract
• Pro forma contractual backlog increases to $4.3 billion
• Western Australia earnings exposure rises from 5% to 15%

Negative

• Transaction funded with 65% senior bank debt and 35% vendor financing
• $40M of consideration deferred via earn-outs and payable over four years
• Company assumes $35M of secured equipment financing
• 2026 EPS expected weighted to H2 due to seasonality and commissioning timing

Key Figures

IMC acquisition value $115 million Total estimated consideration for Iron Mine Contracting acquisition

IMC order book exceeding $1.0 billion Current contracted backlog including a three-year lithium contract

EBITDA multiple 2.5x expected 2026 EBITDA Acquisition valuation before any realized synergies

EPS accretion approximately 20% Estimated incremental earnings per share increase in 2026 from IMC deal

Truck sales 26 Caterpillar 400-ton trucks Sold at book value from Canadian operations to rental provider

Truck purchases 8 Komatsu 240-ton trucks Purchased in Queensland, Australia to support 2026 growth scopes

PP&E and net debt change $20.0 million reduction Estimated year-end decrease in property, plant and equipment and net debt

Proforma backlog $4.3 billion Overall proforma contractual backlog including IMC operations

Market Reality Check

$14.69 Last Close

Volume Volume 158,586 is slightly above the 20-day average of 145,000. normal

Technical Shares at $13.82 are trading below the 200-day MA of $15.20 and 37.41% below the 52-week high of $22.08.

Peers on Argus

NOA was up 0.22% ahead of this news, while key peers showed mixed moves with most down (e.g., OIS -3.05%, FET -2.74%, NGS -1.46%) and FTK up 3.25%, indicating stock-specific rather than broad sector momentum.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 12	Q3 2025 earnings	Negative	+1.9%	Revenue up but margins, adjusted EPS and EBITDA down versus prior year.
Oct 22	Debt financing close	Neutral	+1.6%	Closed additional <b>$125M</b> of 7.75% senior unsecured notes due 2030.
Oct 16	Earnings call notice	Neutral	-0.3%	Announced timing and access details for Q3 2025 results call and webcast.
Oct 07	Note reopening offer	Negative	-0.6%	Proposed reopening to sell <b>$125M</b> of 7.75% senior unsecured notes.
Aug 13	Q2 2025 earnings	Negative	-23.1%	Revenue grew but adjusted EPS collapsed and EBITDA declined amid disruptions.

Pattern Detected

Recent earnings and financing news have mostly seen price moves that align with the underlying tone of the announcements, with one notable divergence on weaker Q3 results.

Recent Company History

Over the last few months, North American Construction Group has combined growth investments with balance sheet actions. Q2 and Q3 2025 earnings showed revenue growth but sharply weaker profitability and higher net debt. The company issued and later reopened 7.75% senior unsecured notes due 2030, increasing outstanding notes to $350M, mainly to repay credit-facility debt. Despite mixed fundamentals, shares reacted positively to the Q3 release. Today’s acquisition-driven expansion in Australia and updated 2026 guidance build on this strategy of leveraging heavy equipment and long-term backlog to support growth.

Market Pulse Summary

This announcement combines an accretive Western Australia acquisition with a detailed operational and financial roadmap. The $115M IMC deal adds an order book exceeding $1.0B and supports a proforma backlog of $4.3B. Management outlined 2026 targets, including adjusted EBITDA of $380–$420M, adjusted EPS of $2.85–$3.15, and free cash flow of $110–$130M, alongside a planned $20.0M reduction in property, plant and equipment and net debt. Investors may watch integration progress, infrastructure bid wins and capital allocation discipline.

Key Terms

earn-out financial

"structured earn-out and deferred payment mechanisms payable to the vendors"

An earn-out is a deal feature in mergers and acquisitions where part of the purchase price is paid later only if the acquired business meets specific future targets, such as revenue or profit goals. It matters to investors because it shares risk between buyer and seller—similar to paying for a used car only if it reaches promised mileage—affecting projected cash flows, valuation assumptions, and the likelihood of future payouts.

deferred payment financial

"structured earn-out and deferred payment mechanisms payable to the vendors"

A deferred payment is an arrangement where a buyer or borrower receives goods, services, or funds now but is allowed to pay at a later date or in installments. For investors, it matters because it changes when cash actually leaves or enters a company—affecting short‑term cash flow, reported liabilities, and the timing of revenue or expense recognition—similar to buying something now with an IOU that can influence a business’s financial health and credit risk.

order book financial

"IMC boasts a strong order book, currently exceeding $1.0 billion"

A stock market order book is a live list of all pending buy and sell requests for a particular security, showing quantities and the prices traders are willing to trade at. Think of it as a market’s bulletin board: it reveals how much demand and supply exists at different prices, so investors can gauge liquidity, how easily a trade will fill, and how close the market is to moving the price.

backlog financial

"This backlog is supported by a strong pipeline of large mining"

A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.

adjusted EBITDA financial

"Adjusted EBITDA | $190 to $210M | No change | | $380 to $420M"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted earnings per share financial

"Adjusted earnings per share | $1.40 to $1.60 | No change |"

Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.

free cash flow financial

"Free cash flow | $95 to $105M | No change | | $110 to $130M"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

sustaining capital spending financial

"Sustaining capital spending | $60 to $70M | No change"

Sustaining capital spending is the money a company spends to maintain and repair its existing equipment, facilities and operations so they keep working at current levels, not to expand or add new capacity. Investors watch it because this “upkeep” cost eats into cash that could fund dividends, debt paydown or growth; think of it like routine home maintenance versus a renovation — necessary to preserve value and future earnings.

AI-generated analysis. Not financial advice.

NACG also Provides Year-End Business Updates on Infrastructure, Fleet Optimization and 2026 Outlook

ACHESON, Alberta, Dec. 18, 2025 (GLOBE NEWSWIRE) -- North American Construction Group Ltd. (“NACG” or the “Company”) (TSX:NOA/NYSE:NOA) today announced that it has entered into a definitive share purchase agreement to acquire Iron Mine Contracting (“IMC”), a privately owned Western Australian diversified mining services contractor. The acquisition is valued at approximately $115 million (“the Transaction”). Concurrent with this announcement, the Company is providing a year-end update on its infrastructure and fleet optimization initiatives, along with its 2026 financial outlook. All references to dollars are in Canadian dollars.

Acquisition of Iron Mine Contracting

IMC is a diversified mining services contractor headquartered in Western Australia. The company provides a full suite of services, including contract mining, crushing, civil and tailings services to a blue-chip customer base. Its operations span key commodity sectors such as gold, iron ore and lithium backed by an established track record of safe and profitable operations.

IMC boasts a strong order book, currently exceeding $1.0 billion and including a recently awarded lithium mining contract with a three-year term. This backlog is supported by a strong pipeline of large mining and civil projects.

Joe Lambert, President and Chief Executive Officer of NACG, commented: “IMC represents a natural and strategic extension of our business into the Western Australian market. The IMC team has built a high-quality business with strong margins sharing NACG’s core culture of operational and safety excellence. This acquisition provides a great foundation to fast track our Western Australia growth strategy which is considered a global powerhouse for base metals, precious metals and critical & rare earth minerals. Combined with the MacKellar Group, we are now an Australian Tier 1 contractor capable of executing complex scopes across the entirety of Australia. IMC is a well-run business in a great market presenting a clear opportunity for low-capital growth by leveraging our underutilized Canadian assets and our highly skilled in-house maintenance team experienced in major component and whole machine rebuilds.”

“Partnering with NACG and the MacKellar Group is a strategic accelerator for IMC, allowing us to meet our customers’ expanding needs within a strong market. This significantly scales our growth potential while preserving the strong culture, agility and customer focus that have always defined our business,” said Clinton Keenan, Chief Executive Officer of IMC. “We look forward to immediately leveraging NACG’s balance sheet and extensive equipment fleet to pursue a greater number of larger projects as this partnership will surely expand our client base and commodity market presence.”

Highlights of the Transaction

• The total estimated consideration of $115 million represents 2.5x of expected EBITDA in 2026, calculated prior to any realized synergies. The acquisition is expected to be significantly accretive, increasing NACG’s incremental earnings per share by approximately 20% in 2026.
• The Transaction will be fully funded by senior-secured bank financing (65% of the purchase price) and vendor-provided debt financing (35% of the purchase price).
• The estimated upfront payment of approximately $40 million will be funded by the Company’s existing revolving credit facility. In addition, NACG plans to assume secured equipment financing of $35 million. The remaining $40 million of the consideration will be addressed through structured earn-out and deferred payment mechanisms payable to the vendors over the next four years.
  

Strategic Rationale for and Highlights of the Acquisition

The acquisition of IMC is immediately accretive and strategically transformative for NACG, delivering key benefits:

• Increased exposure to rare earth & critical minerals in Western Australia: step-change in geographic and commodity diversification with Western Australia set to immediately grow from 5% to 15% of our total earnings;
• Recognition as Tier 1 Contractor in Australia: when combined with MacKellar Group, positioned as nation-wide Tier 1 Australian contractor, capable of pursuing larger opportunities in eastern and western Australia;
• Accelerated growth in unit rate work: fast-tracks our stated objective to leverage our reputation of operational excellence with increased higher margin, lower capital, unit-rate contract work across Australia;
• Partnerships with top-tier producers in Western Australia: demonstrates trust, quality and the ability to meet stringent safety compliance and standards on complex projects; and
• Culture and operating alignment: IMC’s founder-led management team, safety culture, skilled in-house maintenance capabilities, and disciplined project management aligns with NACG.
  

Conditions to the Acquisition and Additional Materials

The Transaction is subject to satisfaction of certain regulatory and other customary closing conditions and is expected to close in the first quarter of 2026. For additional materials about the Transaction, please refer to the Company’s website at www.nacg.ca/presentations.

Advisors to the Transaction

National Bank Capital Markets is acting as financial advisor to NACG on this Transaction. Fasken Martineau DuMoulin LLP is acting as Canadian legal advisor and MinterEllison is acting as Australian legal advisor to NACG.

Business Update on Infrastructure Initiatives and Fleet Utilization

Infrastructure Initiatives Progressing Well

The Company is pleased to provide an update on its infrastructure initiatives, reinforcing the target of achieving 25% of total combined revenue from this sector by 2028.

• Major Projects in Northern Canada: NACG and Nuna Group of Companies (Nuna) are teamed and in position to advance on northern nation-building projects in Canada. Across three defined projects, the partnership is progressing from early market engagement to formal qualification, with multiple tenders anticipated in early 2026.
• Mass Civil Earthwork Scopes in the United States: NACG is actively pursuing opportunities as a subcontractor with shortlisted consortia on two major U.S. opportunities focused on mass civil earthworks. Upcoming pricing and award milestones are expected to open a capital-light growth channel in the U.S. civil earthworks market.
• Defence Construction Canada Portfolio: Nuna, as an Inuit-owned partnership with Arctic defence construction experience, is advantageously positioned to perform scopes of work under the Northern Basing Initiative. Multi-year scopes in northern Canada will be awarded as defence spending is sequenced and released.
• Critical Minerals Infrastructure: NACG and Nuna are in advanced strategic positions to secure critical mineral site access projects across Canada. These high-profile projects are now moving forward into the active bid phase, where NACG is strongly positioned for successful contract awards.

Maximizing Fleet Utilization

In line with our objective to right-size the Canadian oil sands fleet, we executed a binding purchase and sale agreement during the fourth quarter of 2025 which is scheduled to close in the first quarter of 2026. The company sold twenty-six Caterpillar 400-ton haul trucks at book value from both the Mikisew joint venture and wholly-owned subsidiaries to a privately owned heavy equipment rental provider. As part of the agreement, the Company purchased eight Komatsu 240-ton haul trucks currently located in Queensland, Australia. These equipment purchases in Australia directly offset planned 2026 growth capital previously earmarked for expanded Australian scopes, which are scheduled to commence during the second quarter of 2026.

The estimated year-end balance sheet effect of these simultaneous and offsetting sales and purchases is estimated to be a $20.0 million reduction in both property, plant and equipment and net debt. The corresponding income statement impact for 2026 is included in the financial outlook below.

Outlook for 2026 ¹

Including the IMC acquisition operations, overall proforma contractual backlog of $4.3 billion and heavy equipment fleet owned and operated, management has provided the following estimates of key measures for the remainder of 2025 and full year guidance 2026.

	Second half of 2025
	Current	Previous		Full year 2026
Combined revenue	$700 to $750M	No change		$1.5 to $1.7B
Adjusted EBITDA	$190 to $210M	No change		$380 to $420M
Adjusted earnings per share	$1.40 to $1.60	No change		$2.85 to $3.15
Sustaining capital spending	$60 to $70M	No change		$150 to $170M
Free cash flow	$95 to $105M	No change		$110 to $130M
Growth capital spending	$60 to $65M	approx. $25M		$70 to $90M

_______________
¹ This section consists of forward-looking information. See below under “Forward Looking Information” for details.

Commentary on our outlook for remainder of 2025 and full year 2026

• The change to 2025 growth spending is the aforementioned purchase of heavy equipment located in Australia which was brought forward from 2026 growth spending.
• For 2026, adjusted EBITDA is generally estimated to be consistent across the quarters, reflecting a stable overall business model. The outlook for 2026 includes: i) a first quarter close of the IMC acquisition, ii) the heavy equipment fleet reduction in Canada and iii) an approximate six-month contribution from growth capital purchased in Australia from 2025 Q4 through 2026 Q2.
• Adjusted earnings per share is estimated to be weighted more to the second of half of 2026 is primarily due to the expected cold weather in Canada in the first half of the year and the associated impact on depreciation expense with additional impacts from the timing of growth capital spending and commissioning of new assets in Australia and the expected seasonal impact of the wet season on Australian operations.
• Approximately $25.0 million of growth capital spending in 2026 is associated with growth expected from IMC in 2027 and may be reduced post Transaction close when Canadian fleet is assessed for fit.

Momentum leading into 2027

Based on strategic progress and the business trajectory detailed above, we have a strong line of sight to adjusted earnings of more than $4.00 per share in 2027 based on:

• Operating in a steady, consistent manner in our base Australian and Canadian business segments, including full year contributions from near-term growth spending in Australia;
• Executing the planned scope profile for IMC in Western Australia with a standalone 15% growth rate assumed for 2027 based on 2026 growth capital spending;
• Based on an approximate win rate of 10% of near-term infrastructure opportunities in the sizable bid pipeline, we expect to be awarded two significant infrastructure scopes during 2026 to commence work in 2027 related to major nation-building projects in Canada and/or mass civil earthwork projects in the U.S.; and
• Securing, at a minimum, one of the several large resource-based scopes in northern Canada which we are strategically positioned for and are in late-stage bid discussions.

About the Company

North American Construction Group Ltd. is a premier provider of heavy civil construction and mining services in Australia, Canada, and the U.S. For over 70 years, NACG has provided services to the mining, resource and infrastructure construction markets.   

About Iron Mine Contracting

IMC is a diversified mining services contractor headquartered in Western Australia offering a full suite of services, including contract mining and civil construction services to a blue-chip customer base. IMC operations span key commodity sectors such as gold, iron ore and lithium and are backed by an established safety track record. For more information, please refer to the IMC website at www.imcpl.com.au.

For further information contact:

Jason Veenstra, CPA, CA
Chief Financial Officer
North American Construction Group Ltd.
(780) 960-7171
IR@nacg.ca
www.nacg.ca

Forward-Looking Information

The information provided in this release contains forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan,” “potential”, “should”, “target”, “will”, “may” or the negative of those terms or other variations of them or comparable terminology ,and expressly include all statements made under the above heading “Outlook for 2026”. Forward-looking information in this includes, but is not limited to, statements with respect to: the expected proforma contractual backlog; the estimated consideration; the Transaction being accretive and expected accretion on incremental earnings per share; sustaining capital on a combined company basis and the incremental impact of IMC on such figure; free cash flow on a combined company basis and the incremental impact of IMC on such figure; closing of the Transaction occurring in the first quarter of 2026;  expected growth in NACG’s exposure to rare earth and critical minerals and its recognition as a Tier 1 contractor in Australia; the anticipated financial performance for the remainder of 2025 and the full year 2026, including projections for combined revenue, adjusted EBITDA, adjusted earnings per share, sustaining capital spending, free cash flow, and growth capital spending; and the expectation of achieving adjusted earnings of more than $4.00 per share in 2027 based on strategic progress, including IMC standalone growth, infrastructure contract awards, and resource-based scope execution. The material factors or assumptions used to develop the above forward-looking statements include, and the risks and uncertainties to which such forward-looking statements are subject, are highlighted in the Management Discussion and Analysis for the three and nine months ended September 30, 2025 (“MD&A”). There can be no assurance that the forward-looking information will prove to be accurate. Actual results could differ materially from those contemplated by the forward-looking information including: general market performance including capital market conditions and availability and cost of credit; foreign currency and exchange risk; performance of the market sectors that the Company and the IMC serve; impact of factors such as increased pricing pressure and possible margin compression; the regulatory and tax environment; the ability of the Company to complete the Transaction; the ability of the Company to execute its financing plans in connection with the Transaction; that the conditions to closing the Transaction are not satisfied on a timely basis or at all; unanticipated difficulties or expenditures relating to the Transaction; the response of the Company’s and IMC’s business partners, customers and suppliers to the announcement of the Transaction; the impact of competitive responses to the announcement of the Transaction; the diversion of management time on Transaction-related issues; risks associated with greater than anticipated tax liabilities or expenses; the prompt and effective integration of IMC; the ability to achieve the anticipated synergies and value creation-contemplated by Transaction within the expected timeframe or at all; that one or more customers, or other persons with which IMC has contracted, experience insolvency or bankruptcy with resulting delays, costs or losses; political, labour or supplier disruptions; imposition of new duties, tariffs or other legal barriers that impact the IMC’s markets; that growth in markets the IMC serves is less than expected; risks relating to legal proceedings to which the Company or the IMC is or may become a party; and other risks detailed from time to time in the Company’s filings with the Canadian securities regulators.

Actual results could differ materially from those contemplated by such forward-looking statements because of any number of factors and uncertainties, many of which are beyond NACG’s control. Undue reliance should not be placed upon forward-looking statements and NACG undertakes no obligation, other than those required by applicable law, to update or revise those statements. For more complete information about NACG, please read our disclosure documents filed with the SEC and the CSA. These free documents can be obtained by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedarplus.com.

Non-GAAP Financial Measures

This press release presents certain non-GAAP financial measures because management believes that they may be useful to investors in analyzing our business performance, leverage and liquidity. The non-GAAP financial measures we present include "adjusted EBIT", "adjusted EBITDA", "adjusted EBITDA margin", "adjusted EPS", "adjusted net earnings", "capital additions", "capital work in progress", "cash liquidity", "cash provided by operating activities prior to change in working capital", "cash related interest expense", "combined gross profit", "combined gross profit margin", "equity investment depreciation and amortization", "equity investment EBIT", "free cash flow", "general and administrative expenses (excluding stock-based compensation)", "gross profit margin", "growth capital", "margin", "net debt", "net debt leverage", "senior-secured debt", "sustaining capital", "total capital liquidity", and "total combined revenue". The Company uses these non-GAAP financial measures to provide investors with supplemental metrics to evaluate its financial performance, leverage, and liquidity. These non-GAAP measures do not have any standardized meaning under GAAP and, as such, are unlikely to be comparable to similar measures presented by other companies. A non-GAAP financial measure is defined by relevant regulatory authorities as a numerical measure of an issuer's historical or future financial performance, financial position or cash flow that is not specified, defined or determined under the issuer’s GAAP and that is not presented in an issuer’s financial statements. Non-GAAP financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Each non-GAAP financial measure used in this press release is defined and reconciled to its most directly comparable GAAP measure in the "Non-GAAP Financial Measures" section of our MD&A, available on the Company’s website at www.nacg.ca and on SEDAR+ at www.sedarplus.com or EDGAR at www.sec.gov.

FAQ

What is the value and timing of NOA's acquisition of Iron Mine Contracting?

NOA agreed to acquire IMC for approximately $115 million (CAD) with closing expected in Q1 2026.

How will the IMC acquisition affect NOA's earnings per share in 2026?

Management expects the acquisition to be approximately 20% accretive to incremental EPS in 2026.

What backlog and contracts does IMC bring to NOA after the acquisition?

IMC brings an order book exceeding $1.0 billion, including a recently awarded three-year lithium contract, contributing to a $4.3 billion pro forma backlog.

How is the $115 million IMC purchase being financed by NOA?

Financing includes 65% senior‑secured bank financing, 35% vendor debt, an upfront ≈$40M from the revolving credit facility, assumed $35M equipment financing, and $40M in earn-outs/deferred payments.

What is NOA's 2026 revenue and adjusted EBITDA guidance after the IMC acquisition?

NOA provided 2026 guidance of combined revenue of $1.5–$1.7 billion and adjusted EBITDA of $380–$420 million.

How will NOA's geographic and commodity exposure change after acquiring IMC?

Western Australia exposure is expected to increase from 5% to 15% of total earnings, adding rare earths and critical minerals exposure.