CALGARY, Aug. 1 /CNW/ - Crossfire Energy Services Inc. ("Crossfire" or
the "Company") today announced the closing of the acquisition of Alberta-based
Micoda Process Systems Inc. ("Micoda") and the separately owned 107,000 square
foot fabrication facility operated by Micoda in Medicine Hat, Alberta. The
acquisitions were previously announced on July 9, 2007 and April 25, 2007.
Micoda is an Alberta based fabrication business focused upon the design
and manufacture of process equipment to both the domestic and international
oil and gas industry. Micoda was established in 2000. In January 2007, Micoda
relocated into the 107,000 square foot facility the business is currently
"Micoda is a leading provider of innovative solutions to the oil and gas
industry both domestically and abroad," said Dean Bethune, Crossfire's
President and CEO. "Micoda has successfully operated in the international
marketplace and establishes Crossfire's international presence in the United
States and overseas."
The combined purchase price for the acquisitions was $8.8 million
comprised of Common Shares of Crossfire valued at $2.75 million, cash of
$2.0 million and the assumption of debt including a $2.3 million mortgage
secured by the Medicine Hat fabrication facility appraised at $4.6 million.
In conjunction with the acquisition, the Company issued 3,235,294 Common
Shares of Crossfire with a deemed value of $0.85 per common share amounting to
$2.75 million. The cash consideration component of the transactions was paid
with an expansion of the Companies' credit facility.
Crossfire has negotiated a credit facility with a new Chartered Bank,
amounting to $21 million. The Credit facility comprises an expanded operating
line of $10 million and available term debt of $11 million, of which the
Company utilized $3 million to complete the Micoda acquisition.
The operating line bears interest at Bank prime plus 1.5% and is due on
demand. The term debt of $11 million bears interest at Bank prime plus 1.75%,
is amortized over 5 years and is secured by a general security agreement over
all the Company's assets, with the exception of Micoda's Medicine Hat
Fabrication Facility. The Medicine Hat Fabrication Facility was acquired with
a mortgage amounting to $2.3 million, amortized over 15 years, due November
2011 and bears interest at 5.5% per annum.
"The expanded credit facility provides Crossfire with the flexibility to
grow its existing business," said Scott Hamilton, Crossfire's Chief Financial
Officer. "The new credit facility enabled Crossfire to acquire the Medicine
Hat facility and complete the acquisition of Micoda, minimizing shareholder
dilution in the process."
In addition, Crossfire announced the appointment of Mr. Mike Boyd, the
founder of Micoda, as Vice President, International Operations, of Crossfire.
"The merger of Micoda into the Crossfire group of companies is an
important step for our employees, customers and stakeholders", said Mike Boyd,
Crossfire's Vice President, International Operations. "Our fabrication
operations are complimentary to those currently offered by Crossfire. Our
ability to expand services will benefit our customer base both domestically
"Mr. Boyd brings a wealth of experience to the Crossfire management
team," Mr. Bethune continued. "Mr. Boyd has successfully developed a
reputation for establishing and developing business strategies both
domestically and abroad with customers in Canada, the United States and
The Company's business strategy involves merging complimentary service
offerings together. As a result, it enables the Company to operate as a
one-stop-shop for the fabrication, construction and maintenance relating to
oilfield facilities. The strategy is guided by a focus to be recognized as a
specialist in the fabrication of a wide scope of oilfield facility components,
manufacturing subcontractor for major energy facilities projects, as well as
the construction and maintenance of oilfield facilities and pipeline.
Crossfire is a full-service provider of design, fabrication and
installation of oilfield facilities and carries on business under the name
Crossfire Energy Services. The company's success is built upon a commitment to
build long-term relationships with clients, employees and investors. Crossfire
is a publicly traded company on the TSX Venture Exchange, symbol CFE.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: Dean Bethune, President & CEO, Crossfire Energy
Services Inc., Suite 1700, 800 - 6th Avenue SW, Calgary, AB T2P 3G3,
firstname.lastname@example.org, www.crossfireenergy.ca, (403) 237-5115; John
Sadler or Ali Mahdavi, Genoa Management Limited, 10 King Street East, Suite
1250, Toronto, ON M5C 1C3, (416) 962-3300; A. Scott Hamilton, Chief Financial
Officer, Crossfire Energy Services Inc., Suite 1700, 800 - 6th Avenue SW,
Calgary, AB T2P 3G3, email@example.com, www.crossfireenergy.ca,