Petrowest Corporation Announces $20 Million Bought Deal Financing and Agreements for Two Acquisitions
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CALGARY, Aug. 22, 2014 /CNW/ - Petrowest Corporation (the "Company") (TSX:PRW) is pleased to announce the following:
Bought Deal Financing
Petrowest has entered into an agreement with a syndicate of underwriters led by Beacon Securities Limited (collectively, the "Underwriters"), which have agreed to purchase, on a "bought deal" basis 16,000,000 class A common shares (the "Common Shares") of the Company at a price of $1.25 per Common Share, for aggregate gross proceeds of $20 million. The Company has also granted the Underwriters an over-allotment option, exercisable by the Underwriters in whole or in part at any time on or up to 30 days after the closing of the offering, to purchase up to an additional 2,400,000 Common Shares. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the offering will be $23.0 million.
The Company plans to use the net proceeds from the offering for repayment of corporate indebtedness, capital expenditures and for general corporate and working capital purposes, including to fund growth, which may include the acquisitions described in this press release.
The offering is scheduled to close on or about September 16, 2014 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.
The Common Shares will be offered by way of a short form prospectus to be filed in certain of the provinces of Canada pursuant to National Instrument 44-101 Short Form Prospectus Distributions and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.
Agreement to Acquire Trans Carrier Ltd. and Related Companies
Petrowest has entered into a binding agreement to purchase all the shares of Trans Carrier Ltd., a private company based in Fort St. John, British Columbia, in the business of transporting service rigs, test equipment, plant site maintenance equipment and construction equipment, hauling contaminated soil and hazardous waste and crushing gravel in the western provinces of Canada and in the Northwest and Yukon territories. A condition to the acquisition is that Petrowest also agrees to acquire Trans Carrier Rentals Ltd., a related company that rents out oilfield equipment in the same geographic areas.
The aggregate purchase price for Trans Carrier Ltd. and Trans Carrier Rentals Ltd. is $11.5 million plus the assumption of approximately $6.0 million of debt. The purchase price is to be paid with approximately $5.8 million in cash and the issuance of approximately 6.0 million Common Shares having a value of approximately $5.7 million (based on a price per share of $0.95). The assumed debt is based on outstanding obligations at December 31, 2013. Closing is expected to occur on or before September 30, 2014, subject to customary closing conditions including financing.
The services provided by the Trans Carrier businesses will complement the services currently provided by Petrowest in northeastern British Columbia. Petrowest intends to retain senior management of the Trans Carrier businesses, Tyler Kosick and Michael Kosick.
Agreement to Acquire CJM Trucking Ltd.
Petrowest has also entered into a binding agreement to purchase all the shares of CJM Trucking Ltd. for the purchase price of $5.1 million plus the assumption of approximately $4.3 million of debt. The purchase price is to be paid with approximately $2.55 million in cash and the issuance of approximately 2.22 million Common Shares having a value of approximately $2.55 million (based on a price per share of $1.15). Closing is expected to occur on or before October 1, 2014, subject to customary closing conditions including financing.
CJM Trucking Ltd. is a Fort Saskatchewan, Alberta-based private company providing heavy haul, oversized load and equipment hauling and equipment rentals in Western Canada and in the United States. The acquisition of CJM is expected to increase Petrowest's geographic reach for heavy hauling while adding an experienced management team, led by Cliff Moulaison and Jacquie Rocque, to the Petrowest group.
In commenting on the two acquisitions, Petrowest's President and Chief Executive Officer, Rick Quigley, stated: "the acquisition of both CJM Trucking and the Trans Carrier businesses is going to provide a number of synergies to Petrowest while increasing our service offerings, expanding our geographic presence and strengthening our team of experienced operators."
This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The Common Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
Certain of the statements made and information contained herein, including the use of proceeds of the bought deal financing, the time required for closing the proposed acquisitions and the expected benefits of the acquisitions, is "forward-looking information" within the meaning of applicable Canadian securities legislation or "forward-looking statements" within the meaning of the Securities Exchange Act of 1934 of the United States. Generally, these forward-looking statements or information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the volatility of industry conditions (levels of industry activity), the inherent uncertainty of operations and cost estimates and the potential for unexpected costs and expenses, the seasonality of operations, price fluctuations; uncertain political and economic environments; changes in laws or policies, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under risk factors in the Company's current Annual Information Form and management discussion and analysis. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. The forward-looking information contained herein is presently for the purpose of assisting investors in understanding the Company's plans and objectives and may not be appropriate for other purposes. Accordingly, readers are advised not to place undue reliance on forward-looking statements.
Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.
SOURCE Petrowest CorporationFor further information:
Richard Quigley, President and Chief Executive Officer, at (780) 830‐0881, or Lloyd Wiggins, Chief Financial Officer, at (416) 572-2160, or info@petro‐west.com.