WesternOne buys Enerbilt
Sept. 10, 2014 - On September 9, 2014, a subsidiary of WesternOne entered into an acquisition agreement to purchase the assets of Enerbuilt, for an aggregate purchase price of $20 million.
WesternOne expects the Enerbuilt Acquisition to be funded with $14 million of cash and the balance with Common Shares from treasury of WesternOne, the issuance price of which will be based on a 10-day volume weighted average trading price of the Common Shares. The Enerbuilt Acquisition is expected to close on or about September 30, 2014, and is subject to post-closing adjustments relating to capital expenditures, disposals and working capital.
Enerbuilt rents flameless heaters primarily to oil & gas industry customers in Northern Alberta. Enerbuilt operates out of its two facilities in Nisku, Alberta and Fort McMurray, Alberta, and has a fleet of approximately 180 flameless heaters.
WesternOne expects the Enerbuilt Acquisition to:
- add deep expertise in the rental, operation and maintenance of flameless heaters, a new and complementary product line to WesternOne's infrastructure services platform ("WIS");
- add management, sales and technical expertise to WIS;
- enhance WIS' market position and reputation as a dominant supplier of temporary heating services in Western Canada; and
- provide a distribution channel to oil & gas industry customers for other product and service offerings from WIS, namely fuel delivery, indirect fired heaters, power generation and aerial lifts.
WesternOne expects the Enerbuilt Acquisition to be immediately accretive to WesternOne's shareholders based on Enerbuilt's historical adjusted EBITDA of approximately $4 million for the year endedJune 30, 2014. See "Non-IFRS Measures" below.
Acquisition of Additional Membership Interest in Britco USA
On September 9, 2014, an indirect subsidiary of WesternOne entered into an acquisition agreement with a minority investor of Britco USA to acquire an additional 20% equity interest of Britco USA (the "Britco USA Acquisition"). The Britco USA acquisition is expected to close on or about September 30, 2014.
After the closing of Britco USA Acquisition, WesternOne will indirectly own, in aggregate, a 64.55% interest in Britco USA. Since its inception in October 2011, Britco USA has become a major manufacturer of office complexes and workforce accommodations to support the energy, shale oil and gas, and construction and infrastructure sectors in the Mid-West and Southern United States. BritcoUSA recorded adjusted EBITDA of US$7.5 million for the twelve month period ended June 30, 2014.
Additional Capital to Fund Growth Capital Expenditures
WesternOne expects to use up to $10 million of the net proceeds of the Offering to invest in additional fleet equipment and related operating assets which will be deployed to operating locations acrossWestern Canada under the WIS platform, including the recently launched locations in Fort McMurray, Alberta and Terrace, British Columbia (the "Additional WIS CAPEX"). Up to $4 million of the Additional WIS CAPEX will be used towards growing the fleet of flameless heaters subsequent to the Enerbuilt Acquisition.
WesternOne expects to use the remainder of the net proceeds of the Offering to fund working capital and other corporate purposes.
"As WesternOne's new CEO, I am excited about how these transactions align so strongly with our strategy to grow both WIS and Britco through the disciplined deployment of capital and related business acquisitions," said Peter Blake, CEO of WesternOne. "We welcome Enerbuilt's team to WesternOne and look forward to having them, combined with our expanded interest in Britco USA and related capital investments, contribute to our overall goal of delivering exceptional value to all of our shareholders and investors."
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