PATC announces two acquisitions and an equity financing



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

    VANCOUVER, March 1 /CNW/ - Precision Assessment Technology Corporation
("Precision") (TSX:PDT) announced today that it has entered into a definitive
agreement to purchase a southern California drilling services company.
Precision also announced that it has signed a term sheet to purchase an
eastern United States drilling services company and entered into a letter
agreement with Bison Capital Equity Partners II, L.P., a private equity fund
based in Los Angeles, California ("Bison"), with respect to a US$12 million
equity investment in Precision.
    Each of the acquisitions and the financing, when completed, will add to
Precision's management depth, geographic distribution and drilling expertise.
Based on 2006 revenues, Precision anticipates it will, upon completion of
these acquisitions, have consolidated revenues in excess of C$38 million
(approximately US$33 million). The acquisitions and the financing are subject
to fulfillment of various conditions, including formal documentation and
receipt of approval of the Toronto Stock Exchange ("TSX").
    Precision has negotiated definitive agreements and has paid a US$500,000
deposit in connection with the purchase of all of the issued and outstanding
shares of BC2 Environmental Corp. ("BC(2)"), a southern California drilling
company. The company has approximately 40 employees and its 2006 revenues were
approximately US$6.7 million. The acquisition price (including working
capital) will be in the range of US$8.5 to 9.5 million. Payment will be
approximately US$6.65 million at closing and the balance by way of an earnout
over three years. Subject to fulfillment of certain conditions, the purchase
is to close on or before March 27, 2007. It is anticipated that the initial
investment by Bison will be made concurrently with the completion of this
acquisition. This acquisition will provide Precision's California operations
with enhanced capability and presence in the southern California area.
    Precision has also entered into negotiations on the definitive agreements
in connection with the purchase of all of the issued and outstanding shares of
a prominent drilling services company located in the eastern United States.
Focusing primarily on the east and central markets of the United States, this
company has approximately 40 employees and its 2006 revenues are anticipated
to be approximately US$12 million. The acquisition price (including working
capital) is expected to be in the US$8 million range. Payment will be
approximately US$4.8 million cash at closing, US$1.1 million by assumption of
debt and the balance by way of an earnout. Subject to finalization of
definitive documents and satisfaction of certain other conditions, the
purchase is expected to be completed in March, 2007.
    The initial investment by Bison is intended to fund the first acquisition
of BC(2) and provide working capital, and will involve the purchase by Bison
of 8,000 shares of exchangeable preferred stock ("Preferred Stock") of a
wholly-owned US subsidiary of Precision ("Precision US") for a subscription
price of US$1,000 per share. 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. The dividend rate will increase to 14%
per annum in the event Precision US is in default of certain covenants.
Provided that Precision is not in default and performance of the company has
not materially eroded, Precision US can redeem up to 4,000 shares of Preferred
Stock after three years 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. Such
dividend is payable in cash or shares of Precision ("PATC Shares") at the
holder's option.
    Any Preferred Stock not redeemed by Precision US by the fifth anniversary
date will be exchanged by the holder for PATC Shares on the basis of 4,348
PATC Shares for each one share of Preferred Stock (the "Exchange Ratio") with
any accrued and unpaid dividends paid in cash at the time of exchange. The
Exchange Ratio is subject to adjustment prior to closing based on financial
statements for the year ended December 31, 2006. Provided that Precision is
not in default and performance of the company has not materially eroded, any
Preferred Stock still outstanding on the fifth anniversary of the initial
investment date will automatically be exchanged into PATC Shares on the basis
of the Exchange Ratio with accrued and unpaid dividends to be paid in cash.
Holders of the Preferred Stock will, in addition to the foregoing, be entitled
to receive an extraordinary payment on the fifth anniversary of the initial
investment date of US$1,000,000 if no shares of Preferred Stock have been
redeemed by Precision US. Such extraordinary payment is reduced on a pro rata
basis to a minimum of US$500,000 if all 4,000 shares of Preferred Stock have
been redeemed. 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 second investment by Bison, which is anticipated to close
concurrently with the second acquisition, will consist of the purchase by
Bison of 21,703,743 PATC Shares for a purchase price of approximately C$0.22
(US$.1843) per PATC Share for aggregate subscription proceeds of US$4,000,000.
The number of PATC Shares to be issued to the investor is subject to
adjustment prior to closing based on financial statements for the year ended
December 31, 2006.
    The completion of each of the initial and second investments by Bison is
subject to numerous conditions, including receipt of all required regulatory
approvals, including approval of the TSX, and the completion of the proposed
acquisitions described above. The equity investment may also, subject to the
requirements of the TSX, be subject to shareholder approval. The negotiation
of definitive documentation with respect to the Bison investment, including a
security purchase agreement, is under way. These documents will provide for
additional terms and conditions relating to the investments including
provisions relating to registration rights, the appointment of up to two board
members, pre-emptive rights, liquidation rights and certain restrictions on
the activities of Precision without Bison's consent

    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.

    %SEDAR: 00003754E




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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