MONTREAL, July 6, 2017 /CNW Telbec/ - Logistec Corporation (TSX: LGT.A LGT.B), a marine and environmental services provider, today announced that it has acquired 51% of the shares of FER-PAL Construction Ltd. ("FER-PAL"), a trenchless technology company that offers complete water main rehabilitation solutions, for an aggregate purchase price of $49.5 million, subject to adjustments.
Established in 1986 and based in Toronto, Ontario, FER-PAL specializes in water main rehabilitation projects utilizing trenchless technologies of all types and sizes for municipalities in Canada and the United States, including our Aqua-Pipe technology. FER-PAL has enjoyed a longstanding relationship with Sanexen Environmental Services Inc. ("Sanexen"), a subsidiary of Logistec, which has developed the proprietary technology for the trenchless rehabilitation of water mains, commercialized under the name Aqua-Pipe. For the year ended December 31, 2016, FER-PAL generated revenues of $97.4 million and profit attributable to owners of $8.2 million.
"We are very proud to have cemented our relationship with FER-PAL and its dynamic management team," said Madeleine Paquin, President and CEO of Logistec Corporation. "Shaun McKaigue and his colleagues have built tremendous expertise and know-how in the water main rehabilitation business and together, we are confident to have the best team to successfully expand our footprint throughout North America," added Ms. Paquin.
The purchase price paid by Logistec consists of a cash payment of $41.5 million and the issuance of 230,747 Class B subordinate voting shares in the capital of Logistec and is subject to post-closing adjustments. The Logistec shares issued as part of the purchase price will be covered by contractual lock-up restrictions as to 100% of such shares until January 6, 2018 and as to 50% until July 6, 2018, and orderly disposal provisions.
The vendors retain 49% of the shares of FER-PAL, which will be subject to a put option, exercisable by the vendors at any time after July 6, 2021, to sell all the remaining shares to Logistec in three equal tranches over a two year period for cash consideration based on a predetermined purchase price formula, as well as to a call option, exercisable by Logistec at any time after July 6, 2022, to purchase all the remaining shares from the vendors on the same terms.
FER-PAL's management team, including its President, Shaun McKaigue, its Vice-President, Project Management, Francesco Garcea, and its Vice-President, Operations, Gerald Ramsay, will continue to lead FER-PAL in their current roles following the transaction.
As part of the transaction, Sanexen and FER-PAL have extended the terms of their contractual relationship, which include exclusivity rights in favour of FER-PAL to market and promote Sanexen's structural liner products in several Canadian provinces and U.S. states.
Logistec Corporation is based in Montréal (Québec) and provides specialized services to the marine community and industrial companies. It offers bulk, break-bulk and container cargo handling in some 30 ports and 40 terminals located in eastern North America. In addition, Logistec offers marine transportation and cargo services geared principally to the Arctic coastal trade, short-line rail transportation services, as well as marine agency services to foreign shipowners and operators serving the Canadian market.
Logistec also operates in the environmental sector where it provides services to industrial, municipal and governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and manufacturing of woven hoses.
A public company since 1969, Logistec's shares are listed on the Toronto Stock Exchange (TSX) under the ticker symbols LGT.A and LGT.B. For more information, please visit www.logistec.com.
For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial situation and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law. Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on Logistec's website at www.logistec.com.
SOURCE Logistec Corporation
For further information: Jean-Claude Dugas, CPA, CA, Vice-President, Finance, Office: (514) 985-2345, E-mail: [email protected]