Strongco Completes Sale and Leaseback of Fort McMurray Branch
- Proceeds to be Redeployed to Reduce Debt -
TSX Symbol: SQP
MISSISSAUGA, ON, July 8, 2014 /CNW/ - Strongco Corporation (TSX:SQP) announced today that it has completed the sale and 15-year leaseback of its recently constructed branch in Fort McMurray, Alberta to Imperial Equities Inc. for the purchase price of $19.4 million.
As previously announced, Strongco plans to monetize several of its real estate holdings through sale and leaseback transactions, with proceeds to be redeployed to reduce debt. In addition to the completed sale in Fort McMurray, a Purchase and Sale agreement has been signed for the newly constructed Saint Augustin-de-Desmaures, Quebec facility, as well as branches in Val D'Or and Moncton, New Brunswick; and a Letter of Intent with a third purchaser has been agreed to for the sale and leaseback of Strongco's main branch and head office in Mississauga, Ontario. The gross proceeds from the transactions are expected to be approximately $47 million. It is anticipated that the remaining deals will be completed in the third quarter of 2014.
"It has always been management's intent to not tie up capital in real estate assets over the long term, and, given the substantial increase in property values within these regions, the opportunity exists for Strongco to benefit from the current market conditions and use the proceeds more effectively within the business operations," said Bob Dryburgh, President and Chief Executive Officer. "These sale and leasebacks, including the completed transaction in Fort McMurray, support our strategy to continually strengthen Strongco's balance sheet and deploy capital more efficiently."
About Strongco Corporation
Strongco Corporation is a major multiline mobile equipment dealer with operations across Canada and in the United States, operating through Chadwick-BaRoss, Inc. Strongco sells, rents and services equipment used in diverse sectors such as construction, infrastructure, mining, oil and gas, utilities, municipalities, waste management and forestry. The Company has approximately 750 employees serving customers from 27 branches in Canada and five in the United States. Strongco represents leading equipment manufacturers with globally recognized brands, including Volvo Construction Equipment, Case Construction, Manitowoc Crane, including National and Grove, Terex Cedarapids, Terex Finlay, Ponsse, Fassi, Allied Construction, Taylor, ESCO, Dressta, Sennebogen, Jekko, Takeuchi, Link-Belt and Kawasaki. Strongco is listed on the Toronto Stock Exchange under the symbol SQP.
This news release contains "forward-looking" statements within the meaning of applicable securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Strongco or industry results, to be materially different from any future results, events, expectations, performance or achievements expressed or implied by such forward-looking statements. All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. Forward-looking statements typically contain words or phrases such as "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. This news release contains forward-looking statements relating to the expected trading of common shares of Strongco on the TSX, and such statements are based upon the expectations of management.
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