Canada’s FirstOnSite Restoration to join forces with U.S.-based Interstate Restoration

FirstOnSite Restoration G.P. Inc. (the general partner of FirstOnSite Restoration L.P.), Canada’s largest independent disaster restoration services provider, announced on Thursday that it has reached a definitive asset purchase agreement with U.S.-based Interstate Restoration LLC.

Under the agreement, subject to court approval, Interstate Restoration will acquire FirstOnSite. The terms of the agreement were not disclosed.

The combination of FirstOnSite and Interstate Restoration will create the second largest independent North American restoration and reconstruction services provider, giving it greater breadth of capabilities and resources to compete more effectively, FirstOnSite said in a press release. With 19 branch locations across the United States, Interstate Restoration is one of the largest emergency restoration and reconstruction service providers for commercial enterprises.

“By combining FirstOnSite and Interstate Restoration, we will significantly improve our ability to deliver to our clients uninterrupted, best-in-class restoration and reconstruction services on both sides of the border,” said Stacy Mazur, CEO of Interstate Restoration, in the release. “The combined companies bring financial strength, a broader customer base and a wide array of resources, talented personnel and new proficiencies. FirstOnSite is well known for its experienced workforce and brings a complementary culture that focuses on rebuilding lives after disasters. Together, we will have the scale necessary to respond to commercial and residential emergencies across Canada and the U.S., from localized disasters to major catastrophes.”

David Demos, CEO of FirstOnSite, added that the company’s vision has always been to be the “first and best choice for insurers, property owners and employees. Interstate Restoration brings exceptional industry and operational expertise, and this sale allows us to join forces and serve customers across the continent.

The transaction, which has the full support of each company’s board of directors and FirstOnSite’s key financial stakeholders, will be implemented by way of proceedings under the Companies’ Creditors Arrangement Act (CCAA). As such, on Thursday FirstOnSite sought and was granted an order by the Ontario Superior Court of Justice for a stay of proceedings under the CCAA.

The companies expect the transaction to close in less than two months. Delos Capital, a U.S.-based private equity fund, will provide Interstate Restoration with committed financing for the transaction. Alvarez & Marsal Canada Securities ULC acted as FirstOnSite’s financial advisor and investment banker in the sale and investment solicitation process. Under the terms of the Initial Order, FTI Consulting Canada Inc. will serve as the court-appointed monitor of FirstOnSite.

Details of the CCAA filing and related matters will soon be available on the monitor’s website at http://cfcanada.fticonsulting.com/firstonsite.