Bri-Chem Corp. announces letter of intent to acquire Weifang Steel Canada Ltd.



    TSX Venture Exchange
    Symbol "BRY"

    EDMONTON, July 24 /CNW/ - Bri-Chem Corp. ("Bri-Chem") (TSX Venture
Exchange: BRY) a leading Canadian wholesale distributor of industrial drilling
fluids, products and services, is pleased to announce that it has entered into
a letter of intent (the "Letter of Intent") to acquire Weifang Steel Canada
Ltd. ("Weifang"), a Western Canadian-based master wholesale distributor of
steel products to the oil and gas and construction industries. Under the terms
of the Letter of Intent, Bri-Chem has agreed to make an offer to purchase (the
"Proposed Acquisition") all of the issued and outstanding shares of Weifang in
consideration for the purchase price of $8,470,000 and the repayment of
related party loans in the approximate amount of $2,754,000.
    The total aggregate purchase price of $11,224,000 consists of $8,224,000
cash payable as to $5,224,000 on closing and $3,000,000 payable as to
$1,000,000 60 days after the first anniversary of the close of the Proposed
Acquisition (the "Closing Date"), $1,000,000 60 days after the second
anniversary of the Closing Date, and $1,000,000 60 days after the third
anniversary of the Closing Date and $3,000,000 by way of the issuance of
1,304,348 common shares at a price of $2.30 per share. The Proposed
Acquisition of Weifang will expand and diversify Bri-Chem's wholesale
distribution business and will be immediately synergistic by providing Weifang
broader territorial coverage for its products, specifically in Saskatchewan
and Northern USA.
    Weifang, a private corporation duly incorporated and validly existing
under the laws of the Province of Alberta, is a growing metal wholesale
distributor in Western Canada and the USA. Weifang's corporate headquarters is
located in Nisku, Alberta and it has two operating divisions: Steel Pipe and
Products Division and a Manufactures Direct Sales Trading Division. Weifang
specializes in the distribution of metal products through its warehouse
facility in Nisku, Alberta, Canada and 3 distribution sales offices in the
U.S.A. Weifang distributes drill pipe, carbon steel welded pipe, carbon steel
seamless pipe, stainless steel welded pipe, stainless steel seamless pipe,
tubing & casing, sucker rods, galvanized steel products as well as fittings
and flanges. Its customers operate in a wide range of industries, including
oil & gas, manufacturing, forestry, agriculture, construction, and mining.
Weifang's business strategy is to enhance operating results through the
expansion of existing operations by increasing inventory on hand to satisfy
the growing demand in North America for its steel products. Preliminary
unaudited figures from Weifang's operations for the 11 months ended May 31,
2008 were total assets of $13,845,217, sales of $25,935,214 and pretax
earnings of $1,400,429.

    About Bri-Chem

    Bri-Chem operates out of its head office located in Acheson, Alberta and
its principal activity is the wholesale/distribution blending and packaging of
industrial drilling fluid supplies for the oil and gas industry. Bri-Chem
provides over 100 domestic and foreign products to customers throughout
Alberta, British Columbia and Saskatchewan.

    Forward-Looking Statements

    Certain statements contained in this press release, including statements
which may contain words such as "could", "should", "expect", "anticipate",
"believe", "will", and similar expressions and statements relating to matters
that are not historical facts are forward looking statements. Such forward
looking statements involve known and unknown risks and uncertainties which may
cause the actual results, performances or achievements of Bri-Chem to be
materially different from any future results, performances or achievements
expressed or implied by such forward looking statements. Such factors include,
but are not limited to, fluctuations in oil and gas activity levels, political
and economic conditions, and the demand for products provided by Bri-Chem.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.





For further information:

For further information: Don Caron, T: (780) 420-6885, F: (780)
496-9172, dcaron@wacapital.com

Organization Profile

BRI-CHEM CORP.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890