CALGARY, Sept. 1, 2014 /CNW/ - Stuart Olson Inc. ("Stuart Olson" or the "Company") (TSX:SOX) announced today that it has completed the sale of Broda Construction Inc. ("Broda") to TriWest Capital Partners and senior management of Broda for gross cash proceeds of $39 million. Broda is a heavy construction company specializing in aggregate processing, earthwork, civil construction, and concrete production. Stuart Olson acquired Broda in 2010.
Mr. David LeMay, President and Chief Executive Officer of Stuart Olson said, "The divestiture of Broda is the result of a strategic review undertaken to assess our assets and their utilization in the context of our broader business strategy going forward. The proceeds from the sale of Broda will allow us to strengthen our balance sheet and increase our financial flexibility to fund growth initiatives more closely aligned with our strategy of becoming a fully integrated construction company."
Net proceeds of the sale will initially be used to repay outstanding indebtedness under the Company's revolving credit facility. The transaction closed on September 1, 2014 and is subject to normal and customary post-closing balance sheet adjustments.
TD Securities Inc. acted as exclusive financial advisor to Stuart Olson in connection with this transaction.
Stuart Olson expects its third quarter 2014 financial results to include a non-cash investment loss related to the sale of Broda of between $19 and $21 million. This loss will be reflected in discontinued operations. The exclusion of Broda's operating results on a go forward basis is not expected to have a material impact on future reported consolidated net earnings or earnings per share for Stuart Olson.
About Stuart Olson
Stuart Olson provides building construction, commercial and industrial electrical contracting, and industrial insulation services to an array of public and private sector clients. The Company operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Stuart Olson common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "SOX" and "SOX.DB", respectively. www.stuartolson.com
Forward Looking Information
This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward looking information includes, without limitation, statements relating to the Company's business strategy, use of proceeds from the sale of Broda, the Company's financial strength and management's views on the impact of the non-cash loss from the sale of Broda on the Company's consolidated financial results. Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.
The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Company's financial position and the results of its operations as at the date hereof. By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Company's anticipated results will not be achieved. Although the Company believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Company's Annual Information Form filed with the securities regulatory authorities in Canada under the Company's profile at www.sedar.com. Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.
The forward-looking information in this press release is current to the date hereof, and is subject to change following such date. While the Company may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.
SOURCE: Stuart Olson Inc.
For further information:
President and Chief Executive Officer
Stuart Olson Inc.
Executive Vice President and Chief Financial Officer
Stuart Olson Inc.