Mr. Jason Veenstra reports

NORTH AMERICAN CONSTRUCTION GROUP CLOSES ACQUISITION OF MACKELLAR GROUP AND ESTABLISHES TRANSITION TEAM

North American Construction Group Ltd. has closed its acquisition of MacKellar Group with an effective date of Oct. 1, 2023. Total expected consideration is $395 million (the "Consideration"), with the final Consideration amount to be determined based on MacKellar's audited financial statements as of September 30, 2023, which will be reflected in the Company's financial statements for the year ending December 31, 2023. The Transaction was previously announced on July 26, 2023.

Concurrent with closing of the transaction ("Closing"), the Company entered into an amended and restated senior revolving credit facility (the "Credit Facility") with an upsized overall lending capacity of $430 million provided by Canadian dollar and Australian dollar tranches. The Credit Facility permits incurrence of $300 million of secured equipment financing from third party providers resulting in a total borrowing limit of $730 million and representing a $255 million increase from the previous limit of $475 million. As part of the amendment, the maturity date of the Credit Facility was extended to October 3, 2026. The Credit Facility remains comprised solely of a revolver with no scheduled repayments and is not governed by a borrowing base that limits available borrowings. Financial covenants are consistent with the previous agreement and are tested quarterly on a trailing four-quarter basis.

Cash funding for the Closing was provided by draws from the Credit Facility for an upfront payment of A$75 million and the payout of existing equipment financing of approximately A$105 million. Equipment financing of approximately A$115 million was assumed at the Closing with remaining Consideration provided by earn-out and deferred payment mechanisms payable to the sellers over four years.

As part of the Closing, Barry Palmer assumes the role of Regional President, Australia on a transitional basis while continuing in his executive role with the Company as Chief Operating Officer. Barry will lead the MacKellar integration and be supported by an NACG operational and finance transition team based in Australia.

Advisors

National Bank Financial acted as exclusive financial advisor to NACG on the transaction. Fasken Martineau DuMoulin LLP acted as Canadian legal counsel to NACG and Corrs Chambers Westgarth acted as Australian legal counsel to NACG.

About NACG

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

About MacKellar Group

Established in 1966 based on humble family values MacKellar has earned an enviable reputation in the industry for performance and reliability. MacKellar specializes in heavy earthmoving equipment solutions and has a proud history of working on both mining and civil earthwork projects around Australia. For further information, please contact:

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