ACHESON, ALBERTA–(Marketwired – May 11, 2016) – ENTREC Corporation (“ENTREC” or the “Corporation“) (TSX:ENT) is pleased to announce it has acquired the business and assets of HighMark Crane Ltd. (“HighMark”).
HighMark specializes in providing crane rental and operator services and industrial equipment transportation services to customers in the power transmission, mining, and commercial construction industries across Canada. The company possesses a modern equipment fleet that includes nine boom trucks specifically designed to service the power transmission industry as well as several cranes, trucks, trailers and other support equipment with a fair market value of approximately $5.5 million. HighMark is currently servicing multiple power transmission projects throughout the Provinces of Manitoba and Newfoundland and Labrador.
“The acquisition of HighMark represents a key stepping stone in our strategy to further diversify our business outside oil and gas,” comments John M. Stevens, ENTREC’s President and CEO. “Led by Scott Dodds, its President and founder, HighMark has developed a strong reputation as a leading provider of crane services to the power transmission industry right across Canada. We are very pleased to welcome Scott and his employees to the ENTREC family.”
With the acquisition of HighMark, ENTREC is also pleased to announce that it has expanded its operations into the Provinces of Manitoba and Newfoundland and Labrador.
Independent 3rd party appraisals assigned a fair market value of approximately $5.5 million to the HighMark equipment fleet acquired by ENTREC. The aggregate consideration paid for the business and assets of HighMark consisted of (i) the issuance of 1,605,286 common shares of ENTREC; and (ii) $3.5 million in cash (less a holdback of $0.2 million).
Based on the recent appraisals of the Highmark fleet, ENTREC’s stock issued in the transaction was issued at a value of $1.22 per share which was based on the estimated fair market value of ENTREC’s assets less its liabilities (excluding deferred income taxes) as at December 31, 2015. The cash consideration issued in the transaction was limited to an amount that would not exceed the additional borrowing base capacity created under ENTREC’s asset-based credit facility by the additional equipment acquired.
For financial reporting purposes, the common shares issued in the transaction will be recorded at a deemed price of $0.30 per share, being the market price of ENTREC’s common shares as traded on the Toronto Stock Exchange immediately prior to the acquisition.
About ENTREC
ENTREC is an employee-owned heavy haul transportation and crane solutions provider to the oil and natural gas, construction, petrochemical, mining and power generation industries. ENTREC is listed on the Toronto Stock Exchange under the symbol ENT.
John M. Stevens
President & CEO
(780) 960-5625
ENTREC Corporation
Jason Vandenberg
CFO
(780) 960-5630
www.entrec.com