Precision Assessment Technology Corporation - Investment by Bison Capital Equity Partners


    VANCOUVER, March 9 /CNW/ - As previously announced on March 1, 2007,
Precision Assessment Technology Corporation ("Precision" or the "Company")
(TSX:PDT) has 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.
    The proceeds of the financing will be used to fund two acquisitions, to
pay down existing debt and for general working capital and, when completed,
will add to Precision's management depth. The financing is subject to
fulfillment of various conditions, including formal documentation and receipt
of approval of the Toronto Stock Exchange ("TSX").
    The initial investment by Bison 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 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 Preferred Stock will bear a cumulative
dividend of 10% per annum if paid in cash or common shares of Precision ("PATC
Shares") and 12% per annum in the event such dividends accumulate and are not
paid (subject to adjustment in the event Precision US is in default of certain
covenants), and holders will be entitled to receive an extraordinary dividend
on the fifth anniversary (the amount of which shall be dependent upon the
number of shares of Preferred Stock redeemed by Precision US prior to the
fifth anniversary). 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"), subject to adjustment prior to closing based on financial
statements for the year ended December 31, 2006, with any accrued and unpaid
dividends paid in cash at the time of exchange. The Exchange Ratio is also
subject to standard anti-dilution provisions. The initial investment may
result in the issue of up to 34,784,000 PATC Shares. Precision US has the
right to repurchase up to 4,000 shares of Preferred Stock ("Clean-up Right"),
which, if exercised, will reduce the number of PATC Shares issuable to
    The second investment by Bison will consist of the purchase by Bison of
up to 21,703,743 PATC Shares, subject to adjustment prior to closing based on
financial statements for the year ended December 31, 2006, for a purchase
price of approximately C$0.22 (US$.1843) per PATC Share for aggregate
subscription proceeds of US$4,000,000.
    The completion of each of the initial investment by Bison is subject to
numerous conditions, including the concurrent completion of the proposed
acquisition of BC2 Environmental Corp., a southern California drilling
company, 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. The equity financing and the acquisitions are also
subject to receipt of all required regulatory approvals, including approval by
the TSX.
    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 exercised, the equity financing and the acquisitions may result in
the issue of up to an additional 43,102,243 PATC Shares (representing 34.3% of
the issued and outstanding shares following the equity financing and the
acquisitions, or 55.6% 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 60,494,243 PATC
Shares (representing 43.8% of the issued and outstanding shares following the
equity financing and the acquisitions, or 78.1% of the current issued and
    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 may be
considered by the TSX to materially affect control. If all of the Preferred
Stock is exchanged into PATC Shares, Bison will hold up to 56,487,743 PATC
Shares (representing 42.1% 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 18%.
    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 acquisitions and the first and second
investments under the equity financing anticipated to close on or about
March 15, 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 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

    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

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)

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