Target company has a solid operating profitability
DRUMMONDVILLE, QC, July 31, 2013 /CNW Telbec/ - CVTech Group Inc.
("CVTech" or "the Corporation") (TSX: CVT) today announced the
signature of a letter of intent to acquire all the issued and
outstanding shares of a U.S. company ("the Company") engaged in
providing electrical services mainly to the utility industry. Given the
nature of the prospective transaction, the Corporation intends to
disclose the name of the Company only at the closing of the
An initial payment of US$40.0 million will be made at the time of
closing and the acquisition price will be adjusted upon approval of the
audited financial statements of the Company for the fiscal year ending
December 31, 2013. The Company's average earnings before interest,
income taxes, depreciation and amortization ("EBITDA") for the 2011 and
2012 fiscal years was approximately US$10.0 million.
The letter of intent provides that approximately 90% of the transaction
price will be paid in cash from the Corporation's current and available
liquidity, and approximately 10% in common shares of the Corporation.
The letter of intent is subject to the customary closing conditions,
including satisfactory due diligence, execution of a final purchase
agreement, receipt of the necessary approvals and other customary
merger and acquisition procedures. If all of these conditions are
satisfied, the transaction could close in the fourth quarter of 2013.
It is expected that the Company's key executives will ratify employment
contracts with an initial term of three years, to ensure smooth
continuity in day-to-day operations.
"The signature of this letter of intent clearly shows that CVTech is
determined to become a leading player in its target markets," said
André Laramée, President and Chief Executive Officer of CVTech. "The
Company fits perfectly with our strict selection criteria and our
strategic objectives. If this transaction materializes, it will
significantly expand our geographic reach, our expertise and our
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a
leading provider of construction and maintenance services to the public
utility and heavy industrial markets mainly in Quebec, Ontario and the
eastern United States. Through its subsidiaries, the Corporation
provides maintenance and construction services for electricity
transmission and distribution networks, substations and electrical
power houses, as well as the control of vegetation on rights-of-way for
EBITDA is a measure that has no standardized meaning prescribed by IFRS
and is thus considered to be a non-IFRS measure. Therefore, this
measure may not be comparable to similar measures presented by other
issuers. This measure is presented and described in this release in
order to provide additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its operations.
This document may contain forward-looking statements that reflect
management's current expectations regarding future events.
Forward-looking statements are based on a number of factors and include
risks and uncertainties. Actual results may differ from forecast
results. Management assumes no obligation beyond what is required under
the law to update or revise forward-looking statements pursuant to new
information or future events.
Further information regarding CVTech is available in the SEDAR database
(www.sedar.com) and on the Corporation's website at www.cvtech.ca.
SOURCE: CVTECH GROUP INC.
For further information:
André Laramée, MBA
President and Chief Executive Officer
Mario Trahan, CPA, CMA
Chief Financial Officer
Martin Goulet, CFA