WesternOne sells Britco Rentals
Mar. 7, 2017 - WesternOne Inc. has announced the sale of a significant portion of the assets of its subsidiary Britco LP ("Britco"), including its modular space rental business ("Britco Rentals") and its majority equity interest in Britco's modular building manufacturing operations in the United States ("Britco USA"), for total cash consideration of approximately $45.1 million (collectively, the "Transactions"). The Transactions closed today concurrent with the signing of definitive agreements.
The assets of Britco Rentals were sold to a subsidiary of Black Diamond Group Limited for cash consideration of approximately $41.0 million, with the final proceeds remaining subject to customary post-closing working capital adjustments. Britco Rentals operates one of the largest modular space rental fleets in British Columbia, consisting of office complexes, construction site offices, diverse special use buildings and storage containers.
The units of Britco USA, which represent a 64.55% equity interest, were sold to a group of investors led by Britco USA’s management team for cash consideration of approximately $4.1 million. Britco USA provides temporary and permanent residential and commercial modular buildings and offers design-build capabilities as well as turn-key construction management services for customers in the infrastructure, construction, energy and resource sectors within the southern United States.
WesternOne is evaluating strategic options for Britco’s Canadian manufacturing operations, which provide innovative modular construction solutions, with design-build and turn-key capabilities, for permanent applications such as multi-user buildings, hotels and lodges, and offices, and relocatable structures such as office complexes, construction site offices and workforce accommodations. These operations continue to be negatively impacted by the recent downturn in western Canadian markets.
“The Transactions allow WesternOne to be strategically focused on operating and growing its WesternOne Infrastructure Services (WIS) division which offers high quality aerial and construction heat services to key markets in Western Canada,” said Peter Blake, CEO of WesternOne. “The proceeds from the Transactions will provide additional financial flexibility for WesternOne with respect to debt reduction, working capital management and capital investments for the WIS division.”
Raymond James Ltd. acted as financial advisor to WesternOne in connection with the Transactions.
WesternOne also announced today that it entered into an amended and restated credit facility with its senior lender (the “Amended and Restated Credit Facility Agreement”).
The Amended and Restated Credit Facility Agreement included, among other things:
- Change from a term facility to a demand facility.
- Elimination of compliance relating to the ratio of Total Net Debt to EBITDA (as defined in the Amended and Restated Credit Facility Agreement).
- Waiver of compliance relating to the Fixed Charge Coverage Ratio (as defined in the Amended and Restated Credit Facility Agreement) through to the fiscal quarter ended June 30, 2018, and then 1.00:1.0 from July 1, 2018 until and including the December 31, 2018 fiscal quarter end, and 1.15:1.0 thereafter.
- Adjustment of the ratio of Senior Debt to EBITDA to 4.00:1.0 through to the fiscal quarter ended December 31, 2017, 3.50:1.0 from January 1, 2018 until and including the June 30, 2018 fiscal quarter, and 3.00:1.0 thereafter.
- Inclusion of the Current Ratio (as defined in the Amended and Restated Credit Facility Agreement) of 1.30:1.0 from January 1, 2017. Reduction of the revolving operating line from $15 million to $10 million.
- Reduction of the revolving capital expenditure facility from $40 million to $10 million and a restriction on additional advances under the capital expenditure facility until the Fixed Charge Coverage Ratio is at least 1.00:1.0 both on a trailing four quarters basis and as projected at each quarter for the next four quarters.
Additional information respecting the Amended and Restated Credit Facility Agreement will be available on SEDAR at www.sedar.com
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