/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS
NOT AUTHORIZED FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, Aug. 28, 2014 /CNW/ - Northern Frontier Corp. (TSXV: FFF) (the
"Corporation" or "Northern Frontier") is pleased to provide an update to the Corporation's news release
dated August 11, 2014, announcing that Northern Frontier has completed
the Acquisition (as defined below) of Central Water & Equipment
Services Ltd. ("Central Water"), has entered into New Senior Credit Facilities (as defined below) and
closed a $20.0 million bought deal equity offering (the "Offering"). "Northern Frontier is very pleased it has successfully completed
these transactions and looks forward to the inclusion of Central
Water's talented team and excellent service offering to anchor our
logistics business" noted Chris Yellowega, President and CEO.
Acquisition of Central Water
Northern Frontier completed the acquisition (the "Acquisition") of Central Water, pursuant to the terms and conditions of a share
purchase agreement, as previously disclosed. Central Water is a leading
logistics service provider in the bulk water and fluids transfer sector
in western Canada. Central Water's primary business is providing
services for the bulk movement of water used in the testing of large
infrastructure storage tanks and pipelines as well as dewatering and
other services for industrial sites.
Aggregate consideration paid on closing was $27.0 million, comprised of
a cash payment of $22.1 million and the issuance of 1.86 million Units
(as defined below) with an aggregate value of approximately $4.0
million. An additional $0.6 million in cash was also paid for current
year growth capital expenditures. Furthermore, $4.9 million in cash was
placed in escrow, for contingent earn-out consideration, which is
payable at a 3.6x multiple to the extent that Central Water's trailing
12 month EBITDA (as defined below under the heading "Advisories - Non-GAAP Measures") exceeds $7.1 million, to a maximum amount payable of $4.9 million.
New Senior Credit Facilities
The Corporation has established new senior credit facilities ("New Senior Credit Facilities"), in conjunction with and as a condition of, the closing of the
Acquisition and the Offering. On closing, Northern Frontier drew down
$44.6 million on the New Senior Credit Facilities, plus an additional
$4.9 million that was placed in escrow for the earn-out provision noted
above. The principal terms of the New Senior Credit Facilities are as
disclosed in the Corporation's new release dated August 11, 2014.
Furthermore, Northern Frontier obtained waivers from its existing
lenders for its June 30, 2014 covenant breach, as disclosed in a news
release dated August 18, 2014, and concurrently repaid and terminated
all of its existing credit facilities, exclusive of existing finance
leases of which approximately $3.6 million is currently outstanding. As
of August 28, 2014, the Corporation is in compliance with all of its
Bought Deal Equity Offering
Northern Frontier has issued 9,303,000 units (the "Units") to the syndicate of investment dealers co-led by Cormark Securities
Inc., Acumen Capital Finance Partners Limited and GMP Securities L.P.
and including M Partners Inc. (the "Underwriters") comprised of one common share of the Corporation ("Common Shares") and one warrant of the Corporation ("Warrants") at a price of $2.15 per Unit (the "Offering Price") for gross proceeds to the Corporation of approximately $20.0 million.
Each Warrant entitles the holder to acquire one common share of the
Corporation at a price of $3.40 per Warrant Share until February 28,
In addition, the Company has granted the Underwriters an option to
purchase up to an additional 1,395,450 Units from the treasury of the Corporation at the Offering Price for
additional gross proceeds to the Corporation of up to approximately
$3.0 million, exercisable at any time up to September 26, 2014, for
market stabilization purposes and to cover over-allotments, if any.
The Units issued under the Offering were offered by way of a short form prospectus
filed with the securities regulatory authorities in each of the
provinces of British Columbia, Alberta, Saskatchewan, Manitoba and
Ontario, and offered 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, and certain other jurisdictions.
Securities Law Matters
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not constitute
an offer, solicitation or sale of any securities in any jurisdiction in
which such offering, solicitation or sale would be unlawful.
This news release does not constitute an offer of securities for sale in
the United States. The securities being offered have not been, nor will
they be, registered under the United States Securities Act of 1933, as
amended, and such securities may not be offered or sold within the
United States absent U.S. registration or an applicable exemption from
U.S. registration requirements.
EBITDA, which is defined by the Corporation as earnings before finance
costs, taxes, depreciation and amortization, gain/loss on disposal of
property and equipment, share-based compensation and other specified
items, is a non-GAAP measure that does not have a standardized meaning
prescribed by GAAP. Therefore, this financial measure may not be
comparable to similar measures presented by other issuers. Investors
are cautioned that this measure should not be construed as an
alternative to profit or cash flow from operating activities determined
in accordance with GAAP as an indicator of the Corporation's
performance. The Corporation's Management believes that EBITDA is a
useful supplemental measure as it provides an indication of the results
generated by the principal business activities prior to consideration
of how these activities are financed or how the results are taxed in
Additional disclosure regarding EBITDA is included within the
Corporation's Fiscal 2013 and Q2 2014 Management's Discussion and
Analysis and other required disclosure documents which are available
and filed under the Corporation's profile on SEDAR at www.sedar.com.
This news release includes certain statements that constitute
forward-looking statements under applicable securities legislation. All
statements other than statements of historical fact are forward-looking
statements. In some cases, forward-looking statements can be identified
by terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential",
"continue", or the negative of these terms or other comparable
terminology. These forward-looking statements include, among other
things, statements in respect of:
anticipated use of net proceeds from the New Credit Facilities and the
anticipated benefits of completing the Acquisition, New Credit
Facilities and the Offering;
expectations of future financial performance of the Corporation; and
the diversification of the Corporation's operations.
These statements are only predictions and are based upon current
expectations, estimates, projections and assumptions, which the
Corporation believes are reasonable but which may prove to be incorrect
and therefore such forward-looking statements should not be unduly
relied upon. In making such forward-looking statements, assumptions
have been made regarding, among other things, industry activity, the
state of financial markets, business conditions, continued availability
of capital and financing and future oil and natural gas prices.
Although the Corporation believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results
or developments may differ materially from those in the forward-looking
By its nature, forward-looking information involves numerous
assumptions, known and unknown risks and uncertainties, both general
and specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will not
occur. These risks and uncertainties include: that the Corporation's
financial performance does not transpire as expected, that the
Corporation declares any future dividends or the form of payment
thereof and regulatory changes. Investors are cautioned that
forward-looking statements are not guarantees of future performance and
actual results or developments may differ materially from those
projected in the forward-looking statements. The Corporation has no
obligation to update any forward-looking statements set out in this
news release, except as required by applicable law.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to create a substantial
industrial and environmental services business through a buy and build
growth strategy. Currently, the Corporation provides civil construction
and excavation services to the industrial energy industry, primarily in
the in situ Oilsands region south of Fort McMurray, Alberta and on closing of the
Acquisition, now provides bulk water and fluids transfer logistic
services in western Canada.
The Corporation's common shares and common share purchase warrants are
listed on the TSX Venture Exchange under the trading symbol "FFF" and
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE: Northern Frontier Corp.
For further information:
Chris Yellowega - President and Chief Executive Officer
Monty Balderston - Executive Vice President and Chief Financial Officer
Northern Frontier Corp.
400, 435 - 4th Avenue SW
Calgary, AB T2P 3A8