Mr. Terrance McKibbon of Bird reports

BIRD AND STUART OLSON JOIN FORCES TO CREATE A LEADING CANADIAN CONSTRUCTION COMPANY

Bird Construction Inc. and Stuart Olson Inc. have entered into a definitive arrangement agreement under which Bird will acquire Stuart Olson, pursuant to an arrangement under the Business Corporations Act (Alberta), for aggregate consideration of $96.5-million. The transaction, which was unanimously approved by the boards of directors of both companies, is expected to close early in the fourth quarter of 2020, subject to obtaining the required approvals of the Court of Queen's Bench of Alberta, the Competition Bureau, the shareholders, secured bank lenders and unsecured convertible debenture holders of Stuart Olson.

• Top five Canadian diversified infrastructure and construction services company;
• Robust, diversified backlog greater than $3-billion;
• Greater diversification across services, end-markets and geographies;
• Strongly accretive to cash flows from operations before changes in non-cash working capital and adjusted earnings per share;
• Strong pro forma balance sheet.

"The combination of our two businesses will create a company with substantially increased breadth and scale, diversified across services, end-markets and geographies," said Terrance L. McKibbon, president and chief executive officer of Bird. "In addition to combining two strong, experienced work forces, customers will benefit from a dynamic, integrated suite of construction services. The additional scale, leading technology platform and comprehensive service solution will position the company to deliver sustainable value and continuing dividends to shareholders. The combination of reduced interest expense and operating synergies is expected to generate accretion in operating cash flows and adjusted earnings per share in the first full year."

"After a period of extensive review and consideration of the strategic and financial alternatives reasonably available to Stuart Olson, the board determined that this transaction is in the best interests of Stuart Olson and its shareholders given the current and go forward balance sheet and leverage metrics challenges facing Stuart Olson," said David LeMay, president and chief executive officer of Stuart Olson. "We and Bird have a similar history with roots dating back over 100 years in Canada, a shared strategic focus on growth in our respective businesses and strong cultural alignment throughout our organizations. In the face of the challenges currently being experienced by Stuart Olson, including operating under risks related to the COVID-19 pandemic, and the significant economic changes in Canada, it's a move that renews opportunities for our people, expands new services to our clients and is expected to create long-term value for all our stakeholders."

Bird will host an investor call to discuss the transaction on Wednesday, July 29, 2020, at 10 a.m. ET. Full details of the call can be found below.

Transaction highlights

The combination will create an attractive platform positioned for growth:

• Combined work force of 5,000 people with an established presence in a number of Canadian markets;
• Pro forma revenue of approximately $2.5-billion, with a growing proportion of recurring business;
• Aggregate backlog of greater than $3.0-billion plus more than $1.0-billion of pending backlog;
• Increased diversification across services, end-markets and geographies; the combined entity has a well-balanced portfolio of low- to medium-risk projects;
• Enhanced services offering creates new opportunities to grow relationships with key and prospective clients;
• Well positioned to capitalize on growth/stimulus of Canadian infrastructure investment and market recovery activity;
• An expected $25-million in run rate cost synergies by the end of 2021, including reductions in interest and depreciation;
• Emerging as a leading mid-cap construction company, conveying broader public markets appeal and enhanced trading liquidity;
• Stronger balance sheet with appropriate capital structure.

Terms of the transaction

Bird intends to finance the transaction through a combination of common shares of Bird and cash, allowing Stuart Olson's stakeholders receiving shares with the opportunity to participate in the future growth of the combined business.

The aggregate consideration of $96.5-million will consist of $30.0-million cash and $66.5-million of the common shares of Bird, based on the five-day volume-weighted average trading price of the common shares of Bird ending July 17, 2020, of $6.32 per share.

The cash consideration will be financed through available capacity under Bird's existing revolving credit facility with Bank of Montreal.

The aggregate consideration is to be allocated amongst Stuart Olson's secured creditors, Stuart Olson's unsecured convertible debenture holders and Stuart Olson's shareholders, as follows:

• Upon closing of the arrangement agreement, an aggregate amount equal to $70-million will be paid by or on behalf of Stuart Olson to the lenders in full satisfaction of all indebtedness, accrued interest and obligations of Stuart Olson under the secured credit facilities.
• Upon closing, Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts managed by it, will acquire Bird shares (based on the issue price) in exchange for $40-million cash; this $40-million combined with Bird's cash investment of $30-million will constitute the $70-million aggregate to be paid to the secured creditors.
• The portion payable to the debenture holders will consist solely of $22.5-million of Bird shares.
• The portion payable to existing shareholders of Stuart Olson will consist of approximately $4.0-million of Bird shares, representing an exchange ratio of 0.02006051 of a Bird share for each Stuart Olson share.
• At closing, Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts managed by it, will own approximately 18.8 per cent of the common shares outstanding of Bird.

Transaction approvals

The transaction is structured as a statutory plan of arrangement under the Business Corporations Act (Alberta).

Completion of the transaction requires the approval of (i) 66-2/3rds per cent of Stuart Olson's shareholders who vote on a special resolution to consider the arrangement agreement (the Stuart Olson arrangement resolution) and, if required under applicable Canadian securities laws, a majority of Stuart Olson's shareholders after excluding the votes of those persons whose votes are required to be excluded under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, (ii) a majority in number of the secured bank lenders holding at least 66-2/3rds per cent of all of the obligations, indebtedness and liabilities under Stuart Olson's bank credit facility, and (iii) a majority in number of the unsecured convertible debenture holders holding at least 66-2/3rds per cent of all of the obligations, indebtedness and liabilities under the debentures. The transaction is also subject to approval of the Alberta Court of Queen's Bench and approvals and the satisfaction of other customary closing conditions, including approval of the Toronto Stock Exchange and approval under the Competition Act (Canada).

The transaction is expected to close early in the fourth quarter of 2020.

Stuart Olson board of directors recommendations

In early April, 2020, in response to the current economic environment and increased financial and operating pressure, Stuart Olson retained CIBC Capital Markets Inc. and TD Securities Inc. to assist it as financial advisers and agent in respect of a strategic sales process. The process culminated with the Stuart Olson board recommending the transaction with Bird, which was determined to offer Stuart Olson's shareholders the greatest opportunity to recognize value.

In connection with its recommendation, the Stuart Olson board obtained independent legal advice and engaged PricewaterhouseCoopers LLP (PwC), as an independent financial adviser, to provide an opinion that, as at July 28, 2020, and subject to certain assumptions and limitations, the transaction is fair, from a financial point of view, to Stuart Olson's shareholders.

Based on, among other things, such advice and fairness opinion the Stuart Olson board has unanimously determined that the transaction is in the best interests of Stuart Olson and its shareholders and that the consideration is fair from a financial point of view to Stuart Olson's shareholders. The board recommends that Stuart Olson's shareholders vote in favour of the transaction.

Stuart Olson meetings and stakeholder support

The fairness opinion will be included in Stuart Olson's management information circular to be sent to the Stuart Olson shareholders, secured bank lenders and unsecured convertible debenture holders in connection with the special meetings to be held to consider and vote on the transaction. The mailing of the circular is expected in mid- to late August with the company meeting occurring in mid- to late September, 2020.

The transaction has the support, pursuant to support agreements, of 31 per cent of Stuart Olson's shareholders, a majority of the secured bank lenders holding more than 66-2/3rds per cent of the outstanding indebtedness and 100 per cent of the unsecured convertible debenture holders.

The foregoing summary is qualified in its entirety by the provisions of the arrangement agreement, a copy of which will be filed under each of Bird's and Stuart Olson's profiles on SEDAR.

Investor call

Bird will host an investor webcast to discuss the transaction on Wednesday, July 29, 2020, at 10 a.m. ET. Analysts and investors may connect to the webcast on-line. They may also dial 1-855-328-1925 for audio only or to enter the question queue. The presentation can also be found on Bird's website.

Advisers

ATB Capital Markets is acting as financial adviser and Bennett Jones LLP is acting as legal counsel to Bird. Longview Communications & Public Affairs is acting as strategic communications adviser to Bird.

PwC is acting as independent financial adviser to Stuart Olson's board, CIBC Capital Markets and TD Securities acted as transaction process advisers, Norton Rose Fulbright Canada LLP is acting as legal counsel to Stuart Olson, and Osler, Hoskin & Harcourt acted as legal counsel to Stuart Olson's board.

About Bird Construction Inc.

Bird Construction is one of Canada's leading providers of construction services. The company's focus is in markets from the west to east coast with offices servicing Canada's major markets. The company provides services focused primarily on new construction for industrial, commercial and institutional markets as well as heavy civil construction and contract surface mining sectors. The majority of contracts are contracted with a fixed price commercial framework.

About Stuart Olson Inc.

Stuart Olson provides construction services including vertical infrastructure and electrical building systems contracting in the public and private construction markets as well as a full suite of services including electrical, mechanical and specialty trades, such as insulation, cladding and asbestos abatement, in the industrial construction and services market. The company operates office locations and projects throughout Western Canada, Ontario and the territories.

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