PATC announces revised terms to equity financing



    /NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
    THE UNITED STATES/

    VANCOUVER, March 22 /CNW/ - Further to the news releases issued on
March 1, 2007 and March 9, 2007, Precision Assessment Technology Corporation
("Precision") (TSX:PDT) announced today that the terms of the US$12 million
equity investment in Precision by Bison Capital Equity Partners, a private
equity fund based in Los Angeles, California ("Bison"), have been revised to
provide for the issuance of US$12 million in exchangeable preferred stock
("Preferred Stock") of a wholly-owned US subsidiary of Precision ("Precision
US"), rather than the issuance of US$4 million in common shares of Precision
and US$8 million in Preferred Stock of Precision US previously announced.
    The initial investment by Bison will be US$8 million (8,000 shares of
Preferred Stock for a subscription price of US$1,000 per share) to fund the
acquisition of BC(2) Environmental Corp. ("BC(2)"), a southern California
drilling company and to provide working capital. The second investment by
Bison will be US$4 million (4,000 shares of Preferred Stock on the same terms)
which is anticipated to close concurrently with the acquisition of an eastern
United States drilling services company.
    The Preferred Stock will bear a cumulative dividend of 10% per annum if
paid in cash and 12% per annum in the event such dividends accumulate and are
not paid. Up to 50% of the Preferred Stock may be redeemed by Precision US
following the third anniversary date and in certain other circumstances for a
redemption price per share of US$1,000 plus a dividend in such amount as is
necessary to provide an internal rate of return to Bison of 22% after taking
into account any dividends previously paid ("Clean-up Right"). Holders can
request the dividend payable on the exercise of the Clean-up Right be paid by
delivery of common shares of Precision ("PATC Shares") based on the weighted
average trading price of PATC Shares at such time, subject to receipt by
Precision of required regulatory approvals.
    Following the third anniversary date of the initial investment and
subject to certain limitations as to timing, any Preferred Stock not redeemed
by Precision US may be exchanged by the holder for PATC Shares on the basis of
4,348 PATC Shares for each one share of Preferred Stock (approximately C$0.27
per PATC Share), subject to standard anti-dilution provisions (the "Exchange
Ratio"), with any accrued and unpaid dividends paid in cash at the time of
exchange. Any Preferred Stock still outstanding on the fifth anniversary of
the initial investment date will, provided that Precision is not in default
and subject to certain other requirements, be automatically exchanged into
PATC Shares on the basis of the Exchange Ratio with accrued and unpaid
dividends to be paid in cash. In addition to the foregoing, Precision US can
force the exchange of up to 4,000 shares of Preferred Stock for PATC Shares at
the Exchange Ratio in the event that consolidated EBITDA of Precision in any
of the 2007, 2008 and 2009 fiscal years exceeds US$8.9 million. Holders of the
Preferred Stock will be entitled to receive an extraordinary dividend of
US$125 per share to a maximum of US$1 million on Preferred Stock not redeemed
by Precision US, payable at the time of exchange.
    The Preferred Stock issued on the initial and second investments, if
fully exchanged for PATC Common Shares, would result in the issue of up to
52,176,000 PATC Shares. If the Clean-up Right is fully exercised, the
Preferred Stock issued on the initial and second investment may be exchanged
for up to 26,088,000 PATC Shares.
    The share provisions attaching to the Preferred Stock will contain
certain restrictions, including restrictions on indebtedness, minimum EBITDA
requirements, asset sales, acquisitions, capital expenditures and dividends.
The dividend rate will increase to 14% per annum in the event Precision US is
in default of certain covenants ("Default Dividends"). If such Default
Dividends are not paid in cash, the holder may require, subject to receipt by
Precision of regulatory approval, that the default dividends be paid by
issuing PATC Shares at the then current market price.
    The acquisitions and the financing are subject to fulfilment of various
conditions, including formal documentation and receipt of approval of the
Toronto Stock Exchange ("TSX"). The completion of the initial equity
investment by Bison is also subject to the concurrent completion of the
proposed acquisition of BC(2), and the second investment is subject to the
condition that either the eastern United States drilling services company
referenced in Precision's March 1, 2007 news release (or an alternative) be
completed. The proposed acquisitions also contemplate, subject to regulatory
approval, the issuance of up to 4,006,500 PATC Shares as partial purchase
price and, if applicable, earn-out consideration.
    Precision currently has 77,446,107 PATC Shares issued and outstanding on
a non-diluted basis (83,406,614 on a fully diluted basis). If the Clean-up
Right is fully exercised, the equity financing and the acquisitions could
(excluding any dividends paid on common shares) result in the issue of up to
an additional 30,094,500 PATC Shares (representing 22% of the issued and
outstanding shares following the equity financing and the acquisitions, or
38.8% of the current issued and outstanding). If all of the Preferred Stock is
exchanged into PATC Shares, the equity financing and the acquisitions may
result in the issue of up to an additional 56,182,500 PATC Shares
(representing 42% of the issued and outstanding shares following the equity
financing and the acquisitions, or 72.5% of the current issued and
outstanding).
    The equity financing will result in a new holding of more than 20% of the
issued and outstanding PATC Shares by one security holder, which is considered
by the TSX to materially affect control. If all of the Preferred Stock is
exchanged into PATC Shares, Bison or its client accounts will hold up to
52,176,000 PATC Shares (representing 39% of the issued and outstanding shares
on a post-conversion basis). Currently, Conor Pacific Canada Inc. owns, or
exercises control or direction over, 24,781,567 PATC Shares (representing 32%
of the current issued and outstanding). Assuming all of the Preferred Stock is
exchanged into PATC Shares by Bison, Conor Pacific's interest in Precision
will be reduced to approximately 18.8%.
    No insider of the Company has any direct or indirect interest in the
equity financing or the acquisitions, and all of the parties thereto are
dealing at arm's length.
    Shareholder approval of the equity financing and the acquisitions is
required by the TSX. Precision is relying on section 604(d) of the TSX Company
Manual, which permits the Company to provide the TSX with written evidence
that holders of more than 50% of the PATC Shares are familiar with the terms
of, and are in favour of, the equity financing and the acquisitions, in lieu
of holding a shareholders meeting. The initial investment and the acquisition
of BC(2) are anticipated to close on or about March 27, 2007. The second
investment and the acquisition of the eastern United States drilling services
company are expected to be completed on or before April 30, 2007.

    About Precision - Precision provides drilling services for site
assessment and remediation and groundwater assessment, monitoring and
mitigation in the United States. These services are provided using specialized
and innovative drilling and sampling equipment and technologies from offices
in California and Florida. Precision Assessment Technology Corporation
operates through its wholly owned U.S. subsidiaries, Precision Sampling, Inc.
and Trenchless Specialties Inc. Further information can be found at
www.precisiontecha.com. Precision's common shares are listed on the Toronto
Stock Exchange under the symbol "PDT".
    If you wish to receive company press releases via email, please advise
Robert E. Nowack at info@precisiontecha.com

    FORWARD-LOOKING STATEMENTS: This news release contains statements which,
to the extent that they are not recitations of historical fact may constitute
forward-looking information under applicable Canadian securities legislation
or forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Such forward-looking statements or
information may include financial and other projections as well as statements
regarding the Company's future plans, objectives, performance, revenues,
growth, profits, operating expenses or the Company's underlying assumptions.
The words "may", "would", "could", "will", "likely", "expect", "anticipate",
"intend", "estimate", "plan", "forecast", "project" and "believe" or other
similar words and phrases are intended to identify forward-looking statements
or information. Persons reading this news release are cautioned that such
statements or information are only predications, and that the Company's actual
future results or performance may be materially different. Such
forward-looking statements or information involve known and unknown risks,
assumptions, uncertainties and other factors that may cause our actual
results, events or developments, to be materially different from any future
results, events or developments expressed or implied by such forward-looking
statements or information. In the event that any of our assumptions prove to
be incorrect, or in the event that we are impacted by any of the risks
identified above, we may not be able to continue in our business as planned,
or at all. For a complete discussion of the assumptions, risks and
uncertainties related to our business, you are encouraged to review our
filings with Canadian securities regulatory authorities on SEDAR at
http://www.sedar.com.




For further information:

For further information: Robert (Bob) E. Nowack, Chairman and Chief
Executive Officer, Precision Assessment Technology Corporation, Tel: (604)
669-3373 (Ext. 201)

Organization Profile

PRECISION ASSESSMENT TECHNOLOGY CORPORATION

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