CALGARY, Oct. 1 /CNW/ - Horizon North Logistics Inc. ("Horizon")
announced today that it has entered into a letter of intent to acquire the
companies that operate under the name Northern Trailer, headquartered in
Kamloops, British Columbia. The combined purchase price is approximately
$70.5 million, subject to certain closing adjustments. The consideration will
be comprised of $55.5 million of cash and 4,615,400 common shares of Horizon.
The transaction is expected to close on or before November 30, 2007 and is
subject to certain terms and conditions, including the execution of purchase
and sale agreements, the completion of further due diligence and the receipt
of all applicable regulatory approvals.
To fund the cash component, Horizon is arranging a debt financing
facility with a Canadian chartered bank.
Established in 1981, Northern designs, manufactures, sells and rents
portable building solutions for use in a variety of industries. Northern
primarily serves customers located in western Canada in the mining,
construction, forestry and oil and gas sectors. Northern has a rental fleet of
over 1,000 buildings, comprising approximately 450,000 square feet of space,
along with a fleet of specialized transport trucks and construction service
vehicles. The rental fleet has been averaging 85% utilization in 2007 and the
manufacturing plant is currently running at capacity and it is expected to
continue well into 2008 with pending orders and with the current economic
climate. Mark Brown, Northern's founder and principal shareholder, will
continue as president of the operation and the entire management team will
remain in place to serve the growing customer base.
Based on past performance and existing work commitments, it is expected
that Northern's operations will generate EBITDA of $22 to 24 million in 2008.
"Northern fits very well with our strategy of expanding our manufacturing
capability in regions outside of the tight Alberta labor market to enable
Horizon to pursue large camp opportunities. The availability of employees in
the Kamloops area will allow us to expand Northern's manufacturing capacity,
something that would be very difficult to do at Horizon's current
manufacturing facility. Northern also broadens our exposure to the expanding
Canadian mining industry with its significant revenue stream and long standing
customer relationships in this sector. We are very pleased that Mark Brown and
his management and employee team will be joining Horizon to continue to
develop our business from a now broader base", said Ric Peterson, Chairman and
Chief Executive Officer of Horizon.
"I believe that the combination of Horizon and Northern will allow us to
continue to strengthen our customer service capabilities and pursue business
expansion opportunities from a stronger platform of operations," added Mr.
Horizon has scheduled a conference call October 2, 2007 at 12:00 Noon MT.
The conference call dial in number is 1-800-732-1073
An archived recording of the conference call will be available
approximately one hour after the completion of the call until October 17, 2007
by dialing 1-877-289-8525 or 1-416-640-1917, passcode 21248953 followed by the
Advisory Regarding Forward Looking Information
Certain information regarding Horizon and the above described
acquisition, may constitute forward-looking information under applicable
securities law and necessarily involves risks, including, without limitation,
incorrect assessment of the value of the acquisition, failure to realize the
anticipated benefits of the acquisition, the ability to access sufficient
capital from internal and external sources, or the ability to maintain
management and employees of the acquired entity. As a consequence, actual
results may differ materially from those anticipated in the forward-looking
information. Readers are cautioned that the foregoing list of factors is not
exhaustive. Furthermore, the forward-looking information contained in this
news release is provided as of the date of this news release, and Horizon
undertakes no obligation to update publicly or to revise any of the included
forward-looking information, whether as a result of new information, future
events or other wise, except as may be expressly required by applicable
For further information:
For further information: Ric Peterson, Chairman and Chief Executive
Officer, or Bob German, Vice President Finance and Chief Financial Officer,
Telephone (403) 517-4654, Fax (403) 517-4678