Mr. Jean Paschini reports

ADF GROUP INC. PROVIDES AN UPDATE FOLLOWING THE ACQUISITION OF LAR GROUP INC.

ADF Group Inc. completed the acquisition of Groupe LAR Inc. on Sept. 18, 2025. The consideration paid by ADF as part of the transaction consists of a purchase price of $20.4-million, including a closing adjustment related to certain working capital expenses, paid as follows: (i) a cash amount of $16.4-million, including the $1.4-million closing adjustment; and (ii) the issuance of 449,944 of the corporation's subordinate voting shares, representing the equivalent of $4-million in the corporation's subordinate voting shares on the average closing price of the corporation's shares on the Toronto Stock Exchange during the five trading days preceding Aug. 29, 2025. ADF paid the consideration in cash from its available cash.

Highlights:

• Transaction closed on Sept. 18, 2025;
• The consideration paid consists of a purchase price of $19-million, plus a closing adjustment related to certain working capital expenses totalling $1.4-million;
• ADF aims to double, by Jan. 31, 2027, LAR's order backlog, which reached $104-million as at July 31, 2025;
• To support the anticipated growth, ADF plans to invest more than $35-million over the next 24 months at LAR's main plant.

Established in 1942 and based in Metabetchouan in the Saguenay-Lac Saint-Jean region in Quebec, LAR operates in the machining, welding and industrial mechanics sectors. LAR is a Canadian leader in the design, fabrication and installation of mechanically welded steel structures. Primarily focused on the rapidly expanding large-scale hydroelectricity market, LAR also offers customized overhead crane solutions for the heavy industry. LAR generated revenues of $80.9-million during its fiscal year ended Dec. 31, 2024, and had an order backlog of $104.5-million as at July 31, 2025, which is expected to be progressively delivered by the end of ADF's fiscal year ending Jan. 31, 2027.

Markets and order backlog anticipated growth

Now that the acquisition has been finalized, ADF and LAR plan to implement a growth plan supported by the various coming pan-Canadian projects in hydroelectric development. In Quebec alone, Hydro-Quebec plans to invest more than $35-billion in hydroelectric dam renovation and the construction of new projects by 2035. Large-scale projects are also planned in Ontario, British Columbia and the Atlantic provinces. At the same time, and in response to the U.S. tariffs threats, the company expects that clients will prioritize local purchases, which should favour a key Canadian player in the hydro power sector, such as LAR.

In light of this economic outlook and taking advantage of the expected operational synergies between ADF and LAR, the corporation aims to double, by the end of 2027, LAR's order backlog, which stood at $104.5-million as at July 31, 2025.

Capital investment

To support the anticipated growth, substantial investments will need to be made at LAR's fabrication plant located in Metabetchouan in the Saguenay-Lac Saint-Jean region in Quebec. ADF and LAR will not only have to increase the fabrication capacity but will also have to modernize the equipment.

With its extensive experience and recognized for its operational excellence, LAR will benefit from these investments, which should generate operational efficiencies that reflect ADF's approach to maintaining leadership in fabrication equipment and work methods.

Subject to the board of directors' approval, ADF plans to invest over $35-million at LAR's main plant in Saguenay-Lac Saint-Jean over the next 24 months. ADF is expecting to start the construction of new buildings in April, 2026, in order to be able to receive new equipment by December, 2026.

In parallel to these investments and in order to support this anticipated growth, the corporation expects to increase the number of employees at LAR's Metabetchouan plant, which currently employs 200 people.

"As previously mentioned, we are convinced that this transaction will create significant synergies between ADF and LAR and will have a positive contribution to ADF's net results and will diversify ADF's offer where U.S. tariffs threats are concerned while maintaining 200 well-paying jobs in the greater Saguenay-Lac Saint-Jean region and even growing this number," said Jean Paschini, chairman of the board of directors and chief executive officer of the corporation.

"Both companies share common values and we intend to leverage our experience and expertise to benefit not only from operational synergies but also in order to grow the consolidated revenues and results to the benefit of our shareholders," concluded Mr. Paschini.

Conference call with investors

A conference call with investors will be held on Oct. 29, 2025, at 10 a.m. Montreal time to discuss the acquisition of LAR.

This conference call will be held in English. However, financial analysts will be able to ask their questions in French during the question-and-answer session that will follow ADF's management presentation.

To join the conference call without operator assistance, you can register on-line with your phone number to receive an instant automatic reminder.

You can also join the conference call with operator assistance by dialling 1-800-990-4777 a few minutes prior to the conference call scheduled start time.

A replay of the conference call will be available from 1 p.m. on Oct. 29, 2025, until Nov. 5, 2025, by dialling 1-888-660-6345, followed by the access code 93016 followed by the number sign.

The conference call (audio) and a copy of the corporate presentation will also be available on ADF's website. Members of the media are invited to join in listening mode.

About ADF Group Inc.

ADF Group is a North American leader in the design and engineering of connections, fabrication, including the application of industrial coatings, and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non-residential infrastructure sector. ADF Group is one of the few players in the industry capable of handling highly technically complex megaprojects on fast-track schedules in the commercial, institutional, industrial and public sectors. The corporation operates two fabrication plants and two paint shops in Canada and in the United States and a construction division in the United States, which specializes in the installation of steel structures and other related products. The corporation also operates a fabrication plant in Quebec specializing in machining, welding and industrial mechanics, through its division, Groupe LAR, a Canadian leader in the design, fabrication and installation of mechanically welded steel structures.

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