Under an agreement announced on 6 October, ATCO Ltd. will separate its housing, defence and investment businesses into a new publicly traded company called New ATCO, as Emera acquires Canadian Utilities. The spinout will include ATCO Frontec, which delivers construction and operational support for defence and security operations.
Emera and Canadian Utilities are entering an all-share merger of equals with a pro forma enterprise value of about C$72 billion. The companies describe the transaction as the largest merger between two Canadian companies. ATCO shareholders will receive 0.865 of an Emera share and one New ATCO share for every ATCO share they own.
New ATCO will be headquartered in Calgary, with Nancy Southern serving as chair and chief executive officer and Katie Patrick as chief financial and investment officer. Sentgraf Enterprises will receive all of New ATCO’s voting shares. Sentgraf is ATCO’s sole voting shareholder, owns about 27% of its non-voting shares and has irrevocably committed to supporting the transaction.
Southern described the deal as “a defining next chapter for ATCO”. According to the companies, New ATCO will target housing affordability, defence readiness, critical infrastructure and economic security, pursuing both organic growth and acquisitions.
ATCO told investors on the transaction call that New ATCO expects to launch with more than C$700 million in cash and no corporate debt. The businesses earmarked for the standalone company generated about C$1.5 billion in revenue and C$173 million in adjusted earnings in 2025. Their adjusted earnings stood at C$72 million in 2021.
ATCO Frontec’s 42-year record serving government and defence clients includes North American Aerospace Defense Command (NORAD) modernization, over-the-horizon radar, NATO operations and a U.S. Navy worldwide expeditionary contract.
In April 2025, a joint venture between ATCO Frontec and the Inuvialuit Development Corporation received a two-year federal contract worth C$48.4 million to design, build, install and operate the Polar Over-the-Horizon Radar (POTHR) system in the Northwest Territories. The Inuvialuit Development Corporation owns 51% of the venture, with ATCO holding 49%.
Frontec also owns 49% of Nasittuq Corporation, the majority Inuit-owned company that operates the North Warning System and provides site support at Canadian Forces Station Alert. Frontec’s other work includes maintaining 15 Department of National Defence (DND) sites in Alberta for Defence Construction Canada and supporting NATO projects in Hungary, Bosnia and Herzegovina, and Kosovo.
In September, Frontec completed a site at Resolute Bay, Nunavut, in three weeks with capacity to support 350 Canadian Armed Forces personnel for Operation NANOOK-NUNAKPUT. Frontec president Jim Landon said DND now conducts Nanook activity during 11 months of the year, but the permanent Northern Operational Support Hubs intended to support that pace remain in procurement.
Southern identified Arctic training camps, workforce housing, hangars and support infrastructure as potential areas of work, alongside defence accommodation and logistics requirements in Poland and Lithuania. Following the radar contract award in 2025, she called defence opportunities in Canada’s North “astounding”.
The companies expect securityholder votes in early 2027. The transaction also requires approvals under the Competition Act and from the Committee on Foreign Investment in the United States. Closing is anticipated in the third or fourth quarter of 2027, with New ATCO remaining an Alberta company.