NANAIMO, BC, March 5, 2019 /CNW/ - ATLAS ENGINEERED PRODUCTS LTD. ("AEP" or the "Company") (TSX-V: AEP)(OTC Markets: APEUF) today reports that it has completed the acquisition of South Central Building Systems Ltd. ("South Central") of Carman, Manitoba. With this acquisition AEP has added an energetic, high performance team to the AEP family of companies. South Central is a best in class operation with efficient automation, capacity to increase output, and a loyal and growing customer base in the middle of over 25+ growing communities in Southern Manitoba, and easy access to the large Winnipeg market. South Central also offers potential entry into the northern parts of Minnesota and North Dakota.
On closing, AEP paid a $300,000 deposit against the $2,500,000 in cash and assumed a debt that it had agreed to pay on closing (the "Cash Payment"). AEP expects that the balance of the Cash Payment will be paid within the next 7-10 days. AEP will pay the former shareholders of South Central interest on the unpaid portion of the closing cash amounts at a rate of 10% per annum until that amount has been paid. On closing, AEP also issued a total of 1,000,000 common shares to the former shareholders of South Central. In addition, AEP will pay to the former shareholders of South Central an additional $500,000, payable in five equal monthly installments of $100,000 each, beginning three months after closing. The former shareholders of South Central may elect to receive these installment payments in AEP common shares at a price of $0.40 per share, provided that the election is made with respect to his or her full pro rata share of the remaining unpaid balance of those installment payments.
AEP has secured bank financing for the balance of the Cash Payment, with flow of funds expected to occur within the next 7-10 days. If the balance of the Cash Payment is not paid by the close of business on April 30, 2018, the transaction will be unwound, the deposit will be returned to AEP less $50,000 and the AEP shares that were issued will be surrendered for cancellation. Post-closing working capital adjustments to the purchase price are expected to be settled within 30 days after closing.
"It's been a busy year for AEP as we continue to make progress on our integration activities across all plants, removing costs and eliminating duplication," stated Dirk Maritz, CEO and President of AEP. "In fact, our plants are running full throttle during the typical slowest quarter of the year. We continue to make significant inroads into expanding the customer base, upgraded all plants to a standardized design platform, instituted centralized procurement and introduced wall panels, floor trusses and other engineered products at our Nanaimo facilities which already is starting to render positive results."
Mr. Maritz continued, "Now, with the South Central Building Systems acquisition our footprint is expanding again. We are well prepared to integrate South Central into the AEP family and excited to grow our presence into the Canadian Prairies."
Please follow the attached link to view Mr. Dirk Maritz's interview with Proactive Investors:
AEP also announced that, effective March 4, 2019, it granted options to purchase up to 1,390,000 common shares at an exercise price of $0.30 per share to certain directors, officers and employees. The options expire five years after the grant date, with 1/3 of the options granted vesting every six months over an 18 months period.
About Atlas Engineered Products Ltd.
AEP is a newly listed growth company, that continues to acquire and operate profitable, well-established manufacturing and distribution facilities across Canada's truss and engineered products industry. We are meeting the needs of residential and commercial construction clients, by currently operating in British Columbia, Manitoba and Ontario.
We have a well-defined and disciplined acquisition and operating strategy enabling us to scale aggressively, giving us a unique opportunity to consolidate a fragmented industry of independent operators.
Forward Looking Information
Information set forth in this news release contains forward-looking statements. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Such factors include, among other things: risks and uncertainties relating to the Company including those to be described in the Annual Information Form filed by the Company on June 1, 2018 and the Management's Discussion and Analysis ("MD&A") for the Company's fiscal quarter ended August 31, 2018 filed by the Company on October 17, 2018, both on www.sedar.com. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE Atlas Engineered Products Ltd.
For further information: Atlas Engineered Products Ltd., Dirk Maritz, CEO & President, Phone: 1-250-754-1400, Email: email@example.com, Unit 102, 6551 Aulds Road, Nanaimo, BC, V9S 5X9, www.atlasengineeredproducts.com; Atlas Engineered Products Ltd., Bill Woods, Chief Financial Officer, Phone: 1-250-754-1400, Email: firstname.lastname@example.org, Unit 102, 6551 Aulds Road Nanaimo, BC, V9S 5X9, www.atlasengineeredproducts.com; For investor relations please contact: Rob Gamley, Phone: 1-604-689-7422, Email: email@example.com, Contact Financial Corp., 810 - 609 Granville St., Vancouver, BC, V7Y 1G5