Welcome, ladies and gentlemen, to the Bird Construction webcast. We will begin with a presentation led by Terry McKibbon, President and Chief Executive Officer, and Wayne Gingrich, Chief Financial Officer, which will then be followed by a question and answer session. Analysts and institutional investors who wish to ask a question should have their webcast muted when dialing into the conference number provided. At any time during the presentation today, you may press the star and one on your telephone to be placed into the question queue. You will hear a tone acknowledging your request. When we are ready for questions, you will be introduced into the conference in the order that you were received. If you wish to remove yourself from the question queue, you may press star and two. As a reminder, all participants are in listen-only mode and the webcast is being recorded.
Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Wayne Gingrich, CFO of Bird Construction. Please go ahead, Mr. Gingrich.
Thank you, operator. Good morning, everyone, and thank you for joining us on this call. With me today is Terry McKibbon, our President and Chief Executive Officer. Today's call is focused on the transaction we announced earlier this morning. If you have not seen the news release, you can find it on our website at bird.ca/investors. We have prepared some presentation slides, which we will be referencing throughout the call. Those slides are also posted on our website in the investor relations section. Before I turn the call over to Terry, let me remind everyone that certain statements in this presentation may be forward-looking in nature, with a number of risk factors and uncertainties causing actual results to differ materially from the expectations. I would refer you to a more complete disclosure contained in Bird's most recent annual information form.
This includes statements involving known and unknown risks, uncertainties, and other factors outside of management's control that could cause actual results to differ materially from those expressed in the forward-looking statements. Bird does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information about possible risks, please see our annual information form dated March 10th, 2020, which is available on SEDAR or our website. With that, let me turn the call over to Terry.
Thank you. Thank you, Wayne, and good morning, everyone. This is a very exciting day for us and one that is very positive for both companies and stakeholders. Let me begin by outlining today's call. If you'll turn to slide five, we will walk you through the benefits and structure of the transaction, profile the new business, review pro forma financials, and provide some color regarding what the new business will look like and how it will operate, and how it will create value for all stakeholders, including shareholders, as well as our new footprint, our cultural alignment, and value creation opportunities. We'll open the call for your questions. Combination of our two historic businesses will create an attractive platform for growth, and we highlight the many benefits on this slide.
Combination of our businesses will greatly enhance our breadth and scale and further diversify our business across services and markets and geography. We will become a top five construction company in Canada, benefiting our clients with an expanded footprint across multiple service offerings. At the same time, we're expanding our backlog and strengthening our balance sheet. All of these benefits also mean very exciting opportunities for our respective employees. Our greater breadth and strength improve our positioning for infrastructure projects in the years ahead. It will position us to create significant value for stakeholders, including cost savings and earnings accretion. This acquisition is compelling for a number of key strategic, operational, and financial reasons, many of which are outlined on slide seven. Let me highlight some of those benefits. Strategically, this transaction is transformative for us as we are gaining significant additional scope and scale.
It diversifies our offering across services and across geographies, and we will be better placed to self-perform many of these activities, and we expect to be busy with the combined high-profile pipeline both of our companies have built. Operationally, we are gaining scale, a technology platform, and a more comprehensive service solution. We are gaining exposure to the important maintenance, repair, and operations or MRO master services agreement work. Additionally, Stuart Olson's industry-leading capacity to perform construction management is a new growth area for us, which will be advanced through this acquisition. We will be able to deliver a complete range of electrical services, mostly self-performed through the Commercial Systems group. We're acquiring a technology-advanced business that we expect will enhance our operating efficiencies. Finally, the acquisition is accretive to cash flow and earnings with a combined backlog of more than CAD 3 billion.
Post-recovery in oil and gas will create considerable accretion for this combined entity, and we have the opportunity to realize synergies to create additional value and improve pro forma margins. For those of you less familiar with Stuart Olson's business, let's spend some time there on slide eight. Stuart Olson has a diversified portfolio with a balanced exposure to a wide range of public, private, and industrial end markets. The business has three operating segments, Industrial, Buildings, and Commercial Systems. The Industrial Group provides electrical, mechanical, instrumentation, high voltage testing, insulation, cladding, and scaffolding services to clients in energy, petrochemicals, and mining, along with general contracting. The Industrial Group represents about 30% of Stuart Olson's revenue and 34% of EBITDA. The Buildings Group provides general contracting services, including new construction renovations, retrofits to public and private sector clients from B.C. to Ontario.
Buildings generates 45% of the company's revenue and 41% of EBITDA. Commercial Systems Group provides electrical and related system services. This includes design and installation of complex electrical distribution infrastructure, structured cabling, data communication, security, and lifecycle services to both public and private sector clients. This group generates 25% of top-line revenue and 26% of EBITDA. Slide nine provides a historical overview of Bird's business. Our dynamic business model allows us to take advantage of opportunities as they arise through the cycle. The acquisition of Stuart Olson will further strengthen much of what we do. We will see greater diversification of revenue with the acquisition, as seen in the two bars on the right. They compare Bird's 2019 actuals with a combined entity.
Stuart Olson's Commercial Systems business would represent a little more than 10% of revenues of the combined entity, with Buildings now roughly 54%, and Industrial and Heavy Civil, 36%. That greater diversification extends to end markets and geographies as well. Together, we have a combined backlog of greater than CAD 3 billion, plus more than CAD 1 billion of pending backlog. slide 10 illustrates the performance of the two companies individually. Both are projected with a look at historical revenue and adjusted EBITDA, along with forward-looking analyst estimates. I spoke about the geographical diversification resulting from this transaction, and that is illustrated on slide 11. We expect to be in a position to combine a number of offices to facilitate collaboration and teamwork, while also contributing to the synergies this deal offers, which we will discuss in more detail shortly.
If you turn to slide 12, I want to spend some time discussing our aligned culture and values. Our organization boasts two strong and experienced workforces that will efficiently combine to form a company of approximately 5,000 people, including salary and hourly employees. While there's minimal overlap between our operations, our organizations share a number of similarities. We're both deeply rooted in Canada, each with over 100 years of history. We have a shared strategic focus on growth and diversification, and corporate cultures founded on the values of safety, teamwork, people, integrity, and stewardship. This cultural alignment will help pave the way for a smooth integration of our two companies. Stuart Olson is a very progressive company that's been consistently recognized as an employer of choice with its people programs.
This fits well with Bird's Build the Team strategic initiative. We expect to leverage much of what Stuart Olson has accomplished. I'll now turn the call over to Wayne to walk through some of the highlights of the pro forma company.
Thanks, Terry. I'm beginning on slide 13. The first chart on the left looks at the revenue of the pro forma entity, incorporating consensus estimates. This year, that puts the range between CAD 2.1 billion and CAD 2.2 billion, with it increasing to between CAD 2.4 billion and CAD 2.6 billion next year. The EBITDA of the pro forma entity shows a consensus of between CAD 56 million and CAD 76 million this year, increasing to between CAD 87 million and CAD 112 million next year. These illustrate our significantly larger footprint, in part owing to the diverse and geographically balanced backlog of services. The combined entity creates a platform to generate strong, sustainable EBITDA. The combined entity also offers strong pro forma cash flow generation, as illustrated on slide 14. This is an accretive acquisition at low leverage with strong cash flows to support dividend payments.
Sometimes transformative transactions can strain the balance sheet, but we were very careful to avoid that scenario when structuring this acquisition. As we show on slide 15, our pro forma leverage is expected to remain one of the lowest in the industry. This will provide us with flexibility to successfully integrate and grow the combined businesses. Now I'll turn things back to Terry.
We've referenced expected synergies throughout the presentation. Let me spend a moment illustrating the specific opportunities we see from an operating segment perspective on slide 16. Combined, our industrial groups will provide us scale and broader service expertise, something of considerable importance for those clients looking to consolidate their vendor lists. It will also open the door to significant cross-selling opportunities, as we will be better placed to offer complementary services across the group. The combined commercial and institutional segment will have an enhanced geographical diversification, truly from coast to coast, and for Bird, we will be gaining strong relationships with new clients. We believe that the combined entity will also better position us in the emerging smart buildings market. When we look at what our Heavy Civil and Stuart Olson's Commercial Systems, we're largely looking at complementary offerings.
This means we're able to offer a much broader suite of services for Stuart Olson, and it means a full national platform, allowing for new growth opportunities. slide 17 quantifies what those synergies and value creation opportunities look like. We foresee reducing expenditures through a number of areas. One is redundant board fees, executive comp, and public company-related fees. Another is optimizing our leased facilities and direct cost savings associated with greater purchasing economies of scale. This is expected to total approximately CAD 10 million, annualized at the end of 2021, the first full year of operating as a combined entity. This amount does not include expected financial synergies. These stem from Stuart Olson's high leverage and the subsequent elimination of interest payments. Additional financial synergies may come from the write-down of intangible assets upon closing of the transaction, and this too would result in an increase in EPS.
We expect income before taxes and synergies of CAD 25 million in total. Let me spend a couple of moments recapping the transaction itself. If you turn to slide 18, you will see that the aggregate consideration is CAD 96.5 million, consisting of CAD 30 million in cash and CAD 66.5 million in Bird shares based on the five-day VWAP average trading price ending July 17th of CAD 6.32 per share. slide 19 details how the CAD 96.5 million is to be allocated among Stuart Olson secured creditors, unsecured convertible debenture holder, which is Canso Investment Counsel, and Stuart Olson shareholders. CAD 70 million will be paid to the lenders under the secured credit facilities. Canso will acquire CAD 40 million worth of Bird shares, and that amount, combined with Bird's cash investment of CAD 30 million, constitutes the CAD 70 million paid to the secured creditors.
In addition to its purchase of Bird shares, Canso will receive CAD 22.5 million worth of Bird shares. Stuart Olson shareholders will receive approximately CAD 4 million worth of Bird shares. On closing, Canso will own approximately 10 million Bird shares, representing approximately 18.8% of the issued and outstanding shares of the pro forma entity. Our path to closing is shown on slide 20. We are targeting a close in October. Stuart Olson shareholders do need to approve the transaction, and we expect they will be receiving a meeting notification and circular in August, with a meeting following in mid-September. The transaction also remains subject to approval of the Competition Act.
Bird and Stuart Olson will continue to operate independently of each other until such time as the approval has been received and the transaction closes. Let me conclude with a high-level recap of the benefits we expect from this combination. When you put it all together, it's clear to see why we're so excited about the future as a result of this transaction. We will immediately increase our size and scope and offer shareholders of both companies long-term value creation. It will diversify risk across services, end markets, and geographies. Our size and scope will enhance opportunities for our respective employees. It enhances our full-service offerings to clients, which in turn can strengthen our relationships with them. It will also broaden our customer base.
We see opportunities to generate cost savings and operating synergies. It should mean a company with broader markets appeal and ideally enhanced trading liquidity and more analyst coverage. The move continues to support a dividend and enhances our long-term diversified growth prospects. By bringing these two historic entities together and the 5,000 people who work for both, we are creating a premium mid-cap construction company in Canada. With that, I welcome your questions and turn the call back to the operator.
We will now begin the question and answer session. Analysts and institutional investors who wish to ask a question may press star and one on their touch-tone telephone to join the question queue. You will hear a tone acknowledging your request. If you are using a speakerphone, please ensure you lift the handset before pressing any keys. If you are also following along on the webcast, please ensure you have your webcast muted. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. The first question is from Yuri Lynk with Canaccord Genuity. Please go ahead.
Hey, good morning, guys.
Morning, Yuri.
Morning, Yuri.
Just digging in a little bit on putting a fixed price contractor and a mostly cost-reimbursable one together. In the past, that hasn't gone extremely well. This is obviously a bit of a different situation, but how do you plan on running those two portions of your, call it your general contracting business? Will they be under one management team? Will the sales staff be offering both fixed price and reimbursable, or just how do you plan on merging those two very different capabilities?
Yuri, it's a very good question. Let me just outline how this will evolve. Not dissimilar on the industrial side, the two businesses really don't overlap, rarely compete against each other. When you sit on both sides of, and we spent the last two months around the clock working through a process to understand this business, and we understand it very well. When you're able to do that and look at where they operate and how they operate, and then you combine it with our business, first of all, there's a tremendous number of synergies in terms of systems, in terms of employee programs, and they've done a really nice job on engagement. You start to look at facilities in a post-COVID environment with reduced space. We're all obviously adapting to working from home.
Then you essentially have two general contracting groups that service different clients because of the profile of the different contracts. So we don't see in the sense, putting those groups into the same focus because they have different focal points. It's no different than, as you know, in my previous life, we had different types of businesses that did the same thing, but for different clients. In some cases you can have groups in the same facility sharing the same technology, the same programs, the same space, the same efforts, even the same sales force. It's just your salesmen now have a number of different tools in their tool belt.
When you're looking at the combination of the groups, yeah, it's a different type of culture because you're looking at the front end in a commercial or in a construction management role, you're spending a tremendous amount of time with a client on the front end. In our case, we predominantly respond to clients that have projects that are fully baked unless we're doing design builds and things like that. We're typically responding to large initiatives that are fully developed and that's been Bird's history. I see the two fitting together from the time I've spent on this, which has been significant, extremely well.
Maybe one for Wayne, just I missed the breakdown of the cost synergies. Particularly interested in the number that I think you might have given around D&A. Can you just run through that breakdown of the CAD 25 million?
Certainly, Yuri. We're talking about CAD 25 million in total cost synergies. That's broken down with CAD 10 million of EBITDA synergies, which is primarily driven just by public company costs, and in facilities and such. There's about CAD 10 million worth of interest cost savings there as well, and about CAD 5 million of net Depreciation and Amortization savings just with the changes to intangible assets and things like that. A total of CAD 25 million from an EPS perspective.
Yeah, I'll turn it over. Thanks.
Thanks, Yuri.
The next question comes from Maxim Sytchev with National Bank Financial. Please go ahead.
Hi. Good morning, gentlemen.
Morning, Maxim.
Terry, the first question is in relation to the buildings practice that Stuart Olson had. I think that's where some of the legacy issues resided, especially on the back of select transactions. I'm wondering if you can discuss and disclose the level of due diligence that you've been able to undertake, especially now, just to make sure that whatever you're buying on a run rate basis is going to be there in 12 months. Do you mind talking about also the backlog composition?
Sure, yeah.
-things like that? Yeah.
There's not many benefits in the world today or in the economy with COVID. Obviously, as you're working through COVID, as an executive team, we've been extremely focused on this, working from home, working very hard around the clock, seven days a week. We've had full access to 4,400 documents that summarize their business, the history of their business. Our teams have been working through that for over two months as we evolve through the process and reached the various gates. From that perspective, you're correct. I think, from our high level overview of things, through the history of that business, there was acquisitions that were done. There was significant premiums paid to those. They were challenged with those. There was contracts that were part of that obviously were quite difficult and didn't turn out well.
The new business is a business that is actually very similar to ours. The types of contracts that they've contracted have a very similar profile to the projects that we have. The alignment between the two groups, and we've had our challenges as well, and we've learned some things and we made some mistakes and we've worked through those. The alignment of these two groups and the profile of the backlog is very similar and it's quite interesting. We're very comfortable with the backlog of that business as it moves forward. Very impressive team. The thing you learn sometimes in these things, when you get into projects of high risk, and as you know, we've had some projects that we've struggled with the delivery.
Sometimes the delivery models that are being used by agencies are not necessarily appropriate because of the nature of the project and the scale and the changes and the things that are required. They experienced a bit of that, as did we. I think the two entities in a similar timeframe have evolved through that and now have a backlog that we're very pleased with in terms of what that looks like and the scale of it. The opportunities as well is really exciting. I'm really impressed with that as well as this business goes forward.
Okay. No, that's good. Thank you for that. The other question I had was in relation to Canem. I mean, obviously it's a leading electrical contractor, but correct me if I'm wrong, because they do work for other GCs, there is a bit of a Chinese wall around that business. I was trying to understand sort of the going forward plans for this and how you think about growing that part of the business.
You're exactly right. It is a business that works for the industry. It's certainly, if not the top in Western Canada, we view it as a top performer, Western Canada, in that sense. We've got considerable work, I think over CAD 30 million of Canem backlogs on our books. If you talk to our team in Western Canada, they would say, these guys are very strong at what they do, and we work with them extensively and have for years and years. We have no intention of changing that profile. The business will run exactly the same way. It's a Commercial Systems group, is what it's referred to. Same idea, Chinese wall. They work for everyone and ultimately they perform very well. That's allowed that entity to be as successful as it has.
Today, there are considerable opportunities and challenges with the industry moving to smart buildings and smart technology. Yeah, there's a really exciting opportunity for that business to grow, the Commercial Systems, across a wide platform of evolution when you think about some of the creative ways that engineers and architects are creating new buildings that are healthy buildings, that have their own monitoring systems, that have their own security systems. There's a lot going on now in that space, and we've lived through it. Some of our challenges, to be honest with you, in our company, has been that aspect of the building. If you're doing a complex delivery of a healthcare facility, some of those can be very challenging at times.
Ultimately, nice to have that expertise as part of the group overall, and I think that'll provide a certainly support as we move our business forward. We're going to operate it exactly the same way that David was operating it at Stuart Olson.
Right. No, it's an excellent asset for sure. In terms of, maybe lastly, do you mind maybe outlining the synergies in relation to business development and so forth on the MRO and Bird Heavy Civil side in Western Canada? Where do you guys think you can drive that business on a combined basis?
Sure. Yeah. If you think about, our EVP of Industrial was telling me yesterday that he can't ever remember competing, but he's always had a healthy respect for these guys. We've been looking at how we could possibly merge in MRO because as you know, it's a recurring business, so you like to have that recurring revenue because he's signing these long-term MSA agreements. As we did due diligence on that business, we were just blown away by the technology and the way they approach a client and the interface they have with these very large clients. They've grown too, into a broad array of clients, like TransAlta, where they're doing mechanical MRO for them, and they've got some work with Imperial Oil and ExxonMobil with their platform and a large performance at Suncor.
They're in the blue-chip client space, and we see them all the time. We still overlap. When you think about that space, whether it's the Stuart Olson Industrial side or the Bird Industrial Construction side, now you can cross-sell. For example, if we're got a large portfolio at Kearl, there's the ability now off that large base to expand into a much broader program with the same client. As you know, and we've shown, in the last 24 months, I've shown a track record of just moving from one sector in Kearl to the next. This just adds a whole suite of new pieces that can be added to that evolution. That's just one big, large program. IAMGOLD here in Ontario was announced last week. It's proceeding. That's a very large opportunity. They have a large industrial construction base in Sudbury.
You think about that. Our industrial group is certainly interested. There's a cross-selling opportunity where we have a long-term historic industrial business that's been in Sudbury for The guys that run that business are top-shelf leaders, and they've been in the business for 50 years, some of these guys. That just enables it. Our Bird Heavy Civil business would focus on the mining side, and they were telling me this morning as they became aware of this transaction, that this group is a very impressive group to interface with, this industrial construction side. You just look at where we are with our platform in Quebec and in Newfoundland and Labrador and in New Brunswick and Nova Scotia. It just gives you that platform now to cross-sell and expand these other businesses into that space. We're really excited about this, Max.
Yeah, for sure. Maybe lastly, do you mind maybe commenting, I realize that you guys are going to be reporting soonish, but in relation to how you think in relation to Western Canadian infrastructure spending, and certainly Alberta's trying to spend a bit more, just maybe preliminary thoughts on the outlook there.
We see a lot of, as you know, in these types of environments, the governments are always very forward-leaning with stimulus, and we're seeing that now hit the ground, and we're seeing opportunities evolve. We're pretty excited about the prospects of the combined group now moving forward. We've got a couple of months to get this business integrated, that'll be our focus, and it has to be business as usual for the two groups until we get over the finish line, and we get approvals to get through. The programs that are evolving, whether it's healthcare here in Ontario with long-term healthcare facilities, whether it's the large educational platform that you typically will see out of a stimulus program like that, we're seeing that now in Alberta. We're seeing it in other areas. There's a lot of things evolving here.
It feels like there's a bit of a turn, and you see a project like IAMGOLD getting green light, that's a good sign.
Yeah, for sure. Okay, no, that's it for me. Thank you so much.
Thanks, Maxim.
Once again, if you have a question, please press star, then one. The next question comes from Frédéric Bastien with Raymond James. Please go ahead.
Hi. Good morning, everyone.
Hi, Fred.
You painted a nice picture of the sort of the opportunities between the both industrial businesses, you being very early cycle and Stuart Olson being more late cycle, sort of MRO type. I'd like to appreciate or understand better the opportunities that you're seeing in Ontario for both businesses, because I think the last couple of years for Stuart Olson there was a big push to sort of gain market presence in the province. It was met with mixed successes. I just wanted to see if you had any comments on that.
Yeah. As you know, as we came through the backlog with our oil and gas focus in 2016, 2017, we moved back half of 2017 into 2018 in some very focused growth in opportunities like nuclear. We're on the majority of sites today with nuclear focus, nuclear activity. There's an example of the ability to grow in the sense of electrical, mechanical, self-perform. We're not currently doing that in Ontario, but Stuart Olson's got considerable scale for that. As you look at whether it's petrochemical projects, we've got projects underway in Sarnia currently. There's cross-sell opportunities. They have new business evolving, not just in their commercial or in their industrial, mechanical, electrical, but also their Commercial Systems group has new business now that's underway and a new office here in Ontario.
We see it in many fronts with different areas that the cross-sell opportunities. The industrial side here in Ontario, a lot of activity. We're busy, whether it's across the platform of nuclear sites or whether it's across the petrochemical sites, mining sites. Stuart Olson is in the MRO side with hydroelectric. Yeah, it's a nice fit. Obviously, I've spent a lot of time in my career in this area, on the industrial side, in industrial construction. I see this coming together very nicely with the team we have at Bird, and we're very impressed with the team we've met at Stuart Olson. It's a really nice fit. It starts with a very similar culture. We feel it'll be successful.
I mean, you provided some good examples on the industrial side, that obviously extends to the buildings and the commercial side.
Yes. Again, it depends on the opportunity. Obviously our Commercial Systems group will work for the large blue-chip clients in the country, and that's how they operate. That doesn't mean that they won't be able to work for the Bird entities here in Ontario as they grow their business. When you have the platform and you have the knowledge of the landscape and you have the relationships with the unions and you have that whole stakeholder interface, very easy to grow a business that's already got the technical capabilities. For us, that's just a logical launch. That can go right coast to coast.
Great. No, looks promising, and the timing seems to be right. Good luck with everything.
Yeah, certainly the timing. This is very opportunistic for us. This, for me, to be honest with you, Frédéric, it's like you don't see this type of opportunity come along in a lifetime very often. I've not seen the ability to put these two companies together that fit so well in my career. This is pretty special, so.
Thank you.
The next question comes from Chris Murray with ATB Capital Markets. Please go ahead.
Good morning, guys.
Hey, Chris.
Morning, Chris.
Just a couple of things on the mechanics. You've already talked about the fact that Stuart Olson's going to have to have a shareholder meeting and move to a vote. Are there any other approvals? I know you did mention you may have to go for a competition review.
We do because of the scale of the transaction. It immediately has a Competition Bureau review, which will be underway. We'll be filing shortly.
Okay. Are there any other requirements to either get notification or permission from certain customers? I'm thinking more of larger MSA contracts that are multi-year in scope. Anything like that that we may need to pay attention to?
No.
Okay. I guess the next question I've got is just, you kind of alluded to a little bit about the social issues around what's going to happen. Can you just talk a little bit about the integration plan and your thoughts around how do you really get to those synergies that you're talking about, and what the process, at least in your mind, looks like? How do you deal with the fact that you are putting together two separate companies that have their own management teams and all that kind of stuff?
We've had a team of specialists working on this for six, seven weeks as this was evolving, we put the time into that front end with the idea that if we were able to be selected, that we would be very well organized to hit the ground running. We're hitting the ground this afternoon with our first kickoff meeting of our teams. Our team is fully populated. It's all the executives of both companies, in every aspect of it. It's a Bird representative and a Stuart Olson representative. We've got certainly some specialists that have worked on very large integrations. We've got a co-lead of one of the largest integrations in Canadian history that's on our team, supporting us. Yeah, we're very well organized for this. Again, it's only planning. We're planning the integration.
This will be very well planned and very well thought out. We launch on financial close. We'll be moving from there. The intention of this transaction, it's 100% people. We're going to build a business by taking the synergies of both groups and creating something very dynamic. I've seen that throughout my career. I've done tremendous number of large JVs with international contracts around the world, and you sit with these guys, spend a lot of time with them, you learn a lot. I'll tell you, over the last two months, we've learned a lot from the team that's been assembled at Stuart Olson. It's just unfortunate they've had an inappropriate capital structure to weather some of the economic impacts that they've had to weather.
Okay, fair enough. Going to capital structure, part of this is that you end up with a fairly large shareholder, with Canso.
Yes.
Maybe this comes out in the circular when we see it, are they going to be subject to any sort of lock-up or restriction on their ownership of you? Do they end up with any sort of board representation out of this transaction?
I'll say no board representation. The circular will detail how that's structured for Canso. Wayne and I have spent considerable time with Canso executive leads on their accounts and very impressed, and we had some very good dialogue. They're a very impressive firm. They're interested in being a long-term investor, long-term support. We did our homework as well on them from individuals that we could speak to, and we had just glowing feedback on the group. We're quite pleased to have them as part of our stakeholder group.
Great. My last question, maybe Wayne, you want to take this one. When I look at your synergy numbers, and you start playing with them, it does look like your tax rate stays normalized. Are there any tax pools or anything that you're able to grab as part of this transaction?
Yeah, I think for the purposes of our modeling, we've assumed the tax rates are going to remain very similar. There's still work to be done on that front, Chris. A little bit early to answer that one, I think. In terms of what we've presented here, we've just assumed it's constant around the 27%.
There's no expectation that there'll be loss carry forwards or anything like that you can grab?
We haven't modeled that in, no.
Okay. All right. Thanks, folks. That's all my questions.
Thanks, Chris.
There are no further questions at this time. I will now hand the call back over to Mr. McKibbon for closing remarks.
Thank you everyone for taking the time to attend our call. It's a very exciting day for our companies, and we certainly look forward to the future with these two very special groups. Thank you very much.
This concludes today's presentation. You may disconnect your lines.