Northern Frontier to acquire NEC for $32.7-million 2013-04-23 13:01 ET - News Release
Mr. Bradford Creswell reports
NORTHERN FRONTIER CORP. ANNOUNCES PROPOSED PUBLIC OFFERING OF SUBSCRIPTION RECEIPTS AND THE PROPOSED ACQUISITION OF THE NEC GROUP, AN INDUSTRIAL ENERGY SERVICES PROVIDER
Northern Frontier Corp. has entered into a definitive arm's-length share purchase agreement dated April 22, 2013, with 794522 Alberta Ltd. (Numberco), NEC Contractors (2012) Inc. (NEC, and together with Numberco, the NEC group) and the shareholders of the NEC group, being the Kevin Benson Family Trust, the Albert and Colette Benson Family Trust, 1351600 Alberta Ltd., 1351601 Alberta Ltd., Kevin Benson and Colette Benson, pursuant to which the corporation through its wholly owned subsidiary, 1739365 Alberta Ltd., will acquire all of the issued and outstanding shares of Numberco. The corporation has also entered into a definitive arm's-length asset purchase agreement dated April 22, 2013, with CRC Open Camp & Catering Ltd., which is owned by certain of the NEC shareholders, pursuant to which the purchaser will acquire certain assets (the CRC carve-out assets) held by CRC and used in the NEC group business.
The NEC group provides sustaining capital services to large industrial energy customers in the steam-assisted gravity drainage (SAGD) region of northeastern Alberta. The NEC Group's head office and shop is located in Lac La Biche, Alta., and its field location is in Conklin, Alta., which is central to the substantial industrial energy production developments in the vicinity. The business focuses on the continuing demand for services to support operating facilities, sustaining capital expenditures to maintain production levels of those facilities and the development of new production capacity.
The purchase price payable for the acquisition is approximately $48.5-million, subject to adjustment (consisting of approximately $43.5-million in cash and $5.0-million worth of common shares of the corporation) plus an additional contingent payment of $2.0-million, as described in detail below. The purchase price payable for the acquisition was determined using a 3.8-times multiple (3.9 times including the contingent payment of $2.0-million) of the combined, pro forma adjusted earnings before interest, taxes, depreciation and amortization of the NEC Group business (including the CRC carve-out assets) normalized for significant capital asset additions made by the NEC Group during fiscal 2012. Northern Frontier will acquire the combined operation with sufficient working capital to continue operations and on a cash-free, debt-free basis. Following completion of the acquisition, the NEC Group entities will be wholly owned subsidiaries of Northern Frontier.
Concurrent with, and as a condition of, the acquisition, the corporation has engaged GMP Securities LP and Raymond James Ltd. as co-lead agents, together with Acumen Capital Finance Partners Ltd. and Cormark Securities Inc., to complete a fully marketed prospectus offering of subscription receipts for common shares of the corporation on a commercially reasonable efforts basis at a price to be determined in the context of the market. The net proceeds of the offering will be used by the corporation to finance a portion of the purchase price of the acquisition. The corporation expects to file a preliminary prospectus to qualify the distribution of the securities listed above on or about April 23, 2013. The preliminary prospectus is subject to completion and the receipt of applicable regulatory approvals. The offering will be qualified in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. The corporation will provide subsequent public disclosure regarding the Offering on completion of marketing efforts.
The corporation has also agreed to grant the agents an option to purchase up to such number of additional subscription receipts and/or common shares (as applicable, depending on when exercised) as is equal to 15 per cent of the number of subscription receipts sold under the offering to cover overallotments, if any, and for market stabilization purposes. The overallotment option shall be exercisable, in whole or in part, on the closing of the offering and for a period of 30 days thereafter.
The corporation has also entered into a term sheet with a Canadian chartered bank with respect to a credit facility. The corporation expects to establish the credit facility on or prior to the closing of the acquisition. The credit facility is expected to consist of: a $15.0-million committed revolving extendible credit facility; a $20.0-million committed revolving reducing extendible term loan; a treasury risk management facility subject to a limit of $1.0-million; and corporate MasterCard for up to $500,000. The term sheet with respect to the credit facility contains customary conditions precedent to the lender entering into the credit facility, including completion of the offering.
The acquisition is subject to the approval of the TSX Venture Exchange and the policies of the exchange relating to qualifying transactions. The acquisition, when completed, will constitute the qualifying transaction of the corporation pursuant to Policy 2.4 of the exchange.
About the NEC Group and the CRC carve-out assets
The NEC Group provides sustaining capital services to large industrial energy customers in the SAGD region of northeastern Alberta. The NEC Group's head office and shop is located in Lac La Biche, Alta., and its field location is in Conklin, Alta., which is central to the substantial industrial energy production developments in the vicinity. The business focuses on the continuing demand for services to support operating facilities, sustaining capital expenditures to maintain production levels of those facilities and the development of new production capacity.
The NEC Group
Numberco (formerly NEC Contractors Ltd.) is a private Alberta corporation formed on July 29, 1998. Numberco amended its articles on July 5, 2012, to change its name from NEC Contractors to 794522 Alberta. NEC is a private Alberta corporation formed on Dec. 23, 2011. NEC operates as a wholly owned subsidiary of Numberco.
Operations
The NEC Group's services consist primarily of construction and maintenance of civil works for plant replacement and production sustaining projects.
Large SAGD facilities and other industrial projects are often constructed in remote areas with limited access or local services. The owners and operators of such facilities and projects often subcontract the construction of civil works to third party providers. The NEC Group builds site access roads and other engineered earthworks for sustaining capital works, maintenance operations and some initial development projects for SAGD facilities and other industrial facilities. Engineered earthworks projects typically require clearance, excavation, movement and placement of earth to construct plant sites, production pads, roads and corridors. The development of these structures then requires maintenance support services such as repair, gravel placement, water control, snow removal and other functions on a continuous basis, all of which the NEC Group provides.
SAGD facilities, including those necessary to inject the steam into the reservoir and to recover the bitumen emulsion from the reservoir, are constructed on large production pads. The NEC Group provides sustaining capital projects for SAGD facilities, including the construction of initial and supplemental production pads, and the associated roads and corridors necessary to operate such facilities. The continuing demand for services and support to maintain production levels in the SAGD market is expected to grow with production levels. One of the key drivers of the continuing maintenance market in the SAGD industry is the annual need for replacement production. Each production pad for a SAGD plant has multiple well pairs. These well pairs can produce bitumen from a finite area. Once the bitumen is removed and produced, there is a need for a new production pad in order to continue bitumen extraction. Production pads are used to replace declining production and depleted zones, and are required each year to support the SAGD facility's continuing production. These projects proceed on a recurring basis for the life of the facility to supplement and replace declining production from previously constructed infrastructure. The NEC Group constructs approximately three production pads (replacement or supplemental) every year for each 35,000-barrel-per-day increment of its clients' operational capacity.
In addition to activities in the Alberta oil sands, the NEC Group provides similar construction and maintenance services in the civil infrastructure markets, including in support of the construction of powerlines, pipelines and other infrastructure projects.
The NEC Group also provides water and sewage hauling services for local camp facilities. The NEC Group initially provided these services only to its own camp facilities, but found it profitable to extend them to other third party-operated facilities. The NEC Group currently provides such services to one other local camp and management of the corporation believes that there are additional growth opportunities in this area.
Equipment
The NEC Group operates approximately 120 pieces of heavy equipment, numerous pieces of support and service equipment, and many light vehicles, some of which it currently rents from CRC on an exclusive basis. The NEC Group also rents from CRC a camp facility that has 136 beds, a kitchen and supporting equipment, which are used for the operation of the camp. The corporation will acquire all of these assets from CRC as part of the acquisition.
The categories for the NEC Group equipment and carrying values as at Dec. 31, 2012, are detailed in the table (exclusive of the CRC carve-out assets) and are derived from the audited consolidated financial statements of the NEC Group for the year ended Dec. 31, 2012.
NEC EQUIPMENTNet book value Dec. 31, 2012Automotive equipment $ 1,523,936Computer equipment 659Construction and excavating equipment 4,327,828Furniture and fixtures 21,738Leasehold improvements 23,606Shop equipment 172,821Trailers 50,988Automotive equipment under finance lease 436,844Construction and excavating equipment under finance lease 9,428,633Total 15,987,053
Premises
The NEC Group has two locations for its operations. In Lac La Biche, Alta., NEC leases a six-acre lot with a 12,000-square-foot shop and a 6,400-square-foot office from CRC pursuant to a rental agreement dated Jan. 1, 2012. In Conklin, Alta., the NEC Group leases a 20-acre lot with shop and laydown facilities from Alberta, which it intends to acquire prior to the closing of the acquisition, and subleases from CRC a portion of a 20-acre parcel for its camp and associated infrastructure. The parties to the Lac La Biche lease and the Conklin sublease are not at arm's length.
As part of the acquisition, the Lac La Biche lease and the Conklin sublease will be cancelled and replaced with new lease agreements on arm's-length commercial terms.
The Lac La Biche, Alta., facility supports the maintenance and care of the equipment assets, administrative functions, and management. The facility has two bays for heavy equipment maintenance, one bay for truck and light vehicle maintenance, one warehouse, and one welding shop. Miscellaneous storage facilities and fleet parking are also provided in Lac La Biche, Alta.
The Conklin, Alta., location provides field operations offices, shop and camp facilities, a fueling station, water and sewer base of operations, and laydown yards for materials and equipment.
CRC carve-out assets
The CRC carve-out assets consist of approximately 22 pieces of heavy equipment, including rock trucks, excavators, dozers, loaders, graders and compaction equipment. In addition, the CRC carve-out assets include a 136-bed camp facility, including kitchen and supporting equipment which are used for the operation of the camp. NEC currently utilizes the CRC carve-out assets, on an exclusive basis, to operate its business, inclusive of the equipment and camp. Northern Frontier will acquire the equipment and camp, and enter into a facility lease agreement and a land lease agreement with CRC concurrent with the closing of the purchase of the NEC Group. The CRC carve-out assets do not constitute a business for purposes of applicable securities legislation.
The categories for the equipment and carrying values as at Dec. 31, 2012, are detailed in the table and are derived from the audited schedule of CRC carve-out assets.
CRC EQUIPMENTNet book value Dec. 31, 2012Construction and excavating equipment $ 2,403,216Portable accomodations 1,691,801Furniture and fixtures 52,829Total 4,147,846
Benefits of the acquisition
Northern Frontier has developed the strategic objective of creating an integrated resource maintenance, logistics and civil services business through a buy-and-build growth strategy. The acquisition of the NEC Group and the CRC carve-out assets provides a platform from which to execute this strategy. Specifically, management of Northern Frontier believes that the anticipated benefits and upside potential associated with the acquisition include the following:
Established market position in the oil sands
The NEC Group has been operating in Lac La Biche, Alta., and Conklin, Alta., areas since 1998 and through its predecessors since 1978. Services provided by the NEC Group are well established in the market and the NEC Group has deep relationships with many of the SAGD operators in the area as the local services provider. This established market position would be difficult to replicate.
Barriers to entry
The cold climate, remote location, challenging topography, shortages of skilled labour, stringent safety requirements of the major oil companies, large investment in fleets of equipment, connection to the local community and established customer relationships, all combine to form strong barriers to entry for competitors of the NEC Group.
Skilled labour is in short supply
The NEC Group's bases in Lac La Biche and Conklin, Alta., provide it with a competitive advantage because it has been able to retain many of its current employees by providing accommodations, and familiarity with the clients, residence and leadership. Advantages in recruiting from the local work force are also present and the NEC Group expects to continue to recruit skilled labour from the local community in the future.
Demand for civil services, maintenance services and logistics is growing
The planned capital expenditures in the oil sands over the next five years is estimated to be over $110-billion (source: ERCB June, 2012, supply/demand outlook report). With the growing infrastructure base comes increased annual maintenance and operations support budgets in addition to development spending. Annual expenditures are estimated to grow from $17-billion in 2012 to $32-billion in 2022 in the SAGD market alone (source: Canadian Energy Research Institute (study No. 128, March, 2012)).
Opportunity to expand outside of the oil sands and diversify customer base
With access to additional capital, management believes Northern Frontier will be able to expand the NEC Group business through additional acquisitions and geographic expansion. The NEC Group's existing fleet of equipment is highly utilized servicing its existing customers. Management believes with a larger fleet of equipment and new service offerings, the NEC Group will be able to access new industrial markets and gain new customers within its existing markets. Northern Frontier expects SAGD in the Alberta oil sands region to be the highest-growth area for industrial development in Western Canada for the next five years.
Strong board and management expertise
Northern Frontier's board and proposed senior management have experience buying and building businesses similar to the NEC Group. The board believes that the addition of Chris Yellowega, an experienced public company operating executive, and Monty Balderston, an experienced financial executive with public company experience, along with the current slate of directors, will help facilitate the growth strategy and enhance the NEC Group's existing operating management team. The experience and expertise of the NEC shareholders will add to the strength of Northern Frontier's board and the proposed management team as the NEC shareholders will remain with Northern Frontier for periods of between one and three years after the closing of the acquisition.
NEC Group financial summary
The table has been prepared by NEC Group management and includes specific financial statement balances from the audited consolidated financial statements of Numberco for the 12 months ended Dec. 31, 2012, the five months ended Dec. 31, 2011, the 12 months ended July 31, 2011, and 12 months ended July 31, 2010, which were prepared in accordance with Canadian generally accepted accounting principles which are international financial reporting standards for the corporation. The financial information in the table includes the accounts of both Numberco and NEC, provided that NEC was incorporated on Dec. 23, 2011, and financial statements prior to this date only represent the accounts of Numberco.
NEC GROUP FINANCIAL SUMMARY Year ended Five months ended Year ended July 31, Dec. 31, 2012 Dec. 31, 2011 2011 2010Revenue 42,596,121 13,923,892 29,115,138 13,693,485Gross profit 8,894,432 2,845,287 6,081,606 1,827,655Net profit (loss) 1,637,169 715,075 1,906,860 (1,053,876)Total assets 23,664,002 17,080,787 12,551,202 7,544,533Total liabilities 20,830,085 15,884,039 12,069,529 8,969,740
The acquisition
Under the share purchase agreement, the corporation and the purchaser will acquire all of the issued and outstanding shares of Numberco on a cash-free, debt-free basis for a purchase price of approximately $32.7-million, prior to giving effect to certain closing adjustments. The purchase price shall be paid to the NEC shareholders through the issuance by the corporation of $5.0-million of common shares in the capital of the corporation at a deemed price per common share equal to the offering price and the payment by the purchaser of $27.7-million in cash (which amount includes the consideration payable upon the acquisition of certain real property which the NEC Group expects to purchase from Alberta prior to closing of the acquisition and an expected postclosing purchase price adjustment of approximately $4.2-million). Furthermore, the NEC shareholders will receive a contingent payment of $2.0-million in cash payable by the purchaser if the NEC Group achieves an adjusted EBITDA of $13.5-million for the 2013 financial year.
Under the asset purchase agreement, the purchaser will acquire the CRC carve-out assets for a purchase price of $15.8-million in cash (includes an expected postclosing purchase price adjustment of approximately $800,000).
The agreements contain customary representations and warranties of each of Northern Frontier, the purchaser, the NEC shareholders and CRC. Pursuant to the agreements, the parties have agreed, among other things, to use commercially reasonable efforts to complete the transactions contemplated by the agreements, to advise each other of material changes, and to maintain their respective businesses and not take certain actions outside the ordinary course of business.
The agreements contain customary mutual conditions precedent as well as a number of additional conditions precedent in favour of each of Northern Frontier, the NEC shareholders and CRC. The acquisition will not be consummated unless all such conditions are satisfied or waived by the party or parties for whose benefit such conditions exist, to the extent they may be capable of waiver.
The maximum liability of the NEC shareholders for indemnification obligations under the share purchase agreement and of CRC under the asset purchase agreement is limited to the $5.0-million of common shares of the corporation issued as partial consideration for the Numberco shares, other than with respect to losses incurred as a result of fraud or willful misconduct or non-fulfilment of any covenant, or as a result of any incorrectness in or breach of any fundamental representation. Such common shares represent the NEC shareholders' and CRC's complete liability for any losses for which the corporation and the purchaser are entitled to recover under the agreements.
The individual NEC shareholders (being Ms. Benson and Kevin Benson) along with Albert Benson are all the beneficial owners of both the NEC Group and CRC, and reside near Lac La Biche, Alta. The non-individual NEC shareholders are all legal entities incorporated or organized under the laws of Alberta and are controlled collectively by Ms. Benson, Kevin Benson and Albert Benson.
Offering
Concurrent with, and as a condition to the obligations of the corporation and the purchaser to complete the acquisition, the corporation intends to complete the fully marketed offering of subscription receipts, and has engaged GMP Securities and Raymond James as co-lead agents. The subscription receipts will be priced in the context of the market and each subscription receipt will entitle the holder thereof to receive, without payment of additional consideration, one common share of the corporation upon the completion of the acquisition. The corporation has engaged the agents and will pay the agents a cash commission of 6 per cent of the gross proceeds raised in connection with the offering. The corporation will also grant the agents an overallotment option exercisable, in whole or in part, on the closing of the offering and for a period of 30 days thereafter. The net proceeds of the offering will be used to finance the acquisition.
Conditions precedent to completion of the acquisition
Completion of the acquisition is subject to a number of conditions, including but not limited to:
- The conditional acceptance of the exchange;
- The corporation having raised proceeds in the offering or otherwise obtained financing sufficient to satisfy the corporation's and the purchaser's respective obligations in respect of the acquisition;
- The absence of any material adverse effect with respect to the NEC Group, the CRC carve-out assets or the corporation;
- Other customary conditions to closing.
Share capital of the corporation
The corporation currently has 918,533 common shares issued and outstanding.
Proposed board of directors and management
After completion of the acquisition, the proposed board of directors of the resulting issuer will comprise nine directors: Bradford Creswell, John Jacobs, Trevor Haynes, Darin Coutu, Edward Redmond, Don Basnett, Darrell Peterson, Rob Hunt and Chris Yellowega. All of the proposed directors are current directors of the corporation with the exception of Mr. Yellowega.
The proposed senior officers of the resulting issuer appointed by the board of directors following completion of the acquisition will include Mr. Yellowega as president and chief executive officer, and Mr. Balderston as executive vice-president, chief financial officer and corporate secretary.
The following is a background of each of the proposed directors and officers of the resulting issuer.
Chris Yellowega -- proposed director, president and chief executive officer
Mr. Yellowega will be appointed as the president, chief executive officer and a director at the closing of the acquisition. Mr. Yellowega will fulfill his role as the president and chief executive officer on a full-time basis. Mr. Yellowega is an experienced senior executive and professional engineer. He has 20 years of varied experience in engineering, operations, maintenance and senior management roles in the mining and energy industries. Mr. Yellowega brings a depth of experience in operating and service markets in the target business areas for Northern Frontier, and has a strong business focus on strategy, execution and cost. From 2008 to 2012, Mr. Yellowega was vice-president, construction, and prior thereto vice-president, operations, with North American Energy Partners Inc., a provider of mining, heavy construction, industrial, piling and pipeline services in Western Canada. North American is listed on the New York Stock Exchange and the Toronto Stock Exchange under the trading symbol NOA. From 2005 to 2008, he was vice-president, upstream, with Synenco Energy Inc., a former oil sands resource development company involved in the Northern Lights upstream mining and bitumen extraction project which was listed on the TSX. Synenco was acquired by Total SA in 2008. From 2000 to 2005, Mr. Yellowega was a senior manager with Shell's oil sands group, involved with the Muskeg River mine development for Albian Sands Energy Inc.
Mr. Yellowega graduated from the University of Alberta in 1993 with a bachelor of science degree in mining engineering.
Monty Balderston -- proposed executive vice-president, chief financial officer and corporate secretary
Mr. Balderston will be appointed as the executive vice-president, chief financial officer and corporate secretary at the closing of the acquisition. Mr. Balderston will fulfill his role as executive vice-president, chief financial officer and corporate secretary on a full-time basis. Mr. Balderston is a chartered accountant with over 17 years of experience, including over 10 years in senior leadership roles with publicly traded companies. From June, 2011, to April, 2012, he acted as chief financial officer of Silica North Resources Ltd., a privately held start-up company focused on developing deposits and supplying proppant (frac sand) to the oil and natural gas industry. From May, 2003, to June, 2011, Mr. Balderston held various senior financial roles including chief financial officer from March, 2008, to June, 2011, of Peak Energy Services Ltd., a diversified energy services company providing drilling and production services to its customers in both the conventional and unconventional oil and natural gas industry in Western Canada and the United States, as well as the oil sands regions of Western Canada. Peak was listed on the TSX until it was purchased by Clean Harbors Inc. in June, 2011. From May, 2000, to July, 2002, he held senior financial roles with International Properties Group Ltd., a real estate company, which was listed on the TSX until late 2002. From September, 1995, to April, 2000, Mr. Balderston was with the accounting firm PricewaterhouseCoopers LLP and held various progressive finance related roles in both the audit and management consulting practices.
Mr. Balderston graduated from the Northern Alberta Institute of Technology with a finance diploma (with honours) in 1991 and graduated from the University of Alberta with a bachelor of commerce degree (with distinction) in 1995. He earned his chartered accounting designation in Alberta in 1998.
Bradford Creswell -- proposed director
Mr. Creswell is the president and has been a director of the corporation since October, 2011. Mr. Creswell is a partner and co-founder of NCA Management LLC (formerly Northwest Capital Appreciation Inc.), a private equity firm which he co-founded in Seattle, Wash., in 1992. In 2006, a limited liability partnership organized by NCA acquired NC Services Group Ltd. (NCSG), a crane and heavy haul company based in Edmonton, Alta., serving the refining, oil and natural gas, and wind energy sectors in Western Canada and the northwestern United States.
Mr. Creswell currently serves on the board of directors of NCSG and is a member of the audit committee, and on the board of directors of Warwick & Kent Holdings Ltd., a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry. Mr. Creswell previously has served on the board of directors, and audit and compensation committees of numerous private companies, and was chief financial officer of Carson Products Corp., a public, global manufacturer and marketer of hair care products listed on the NYSE.
Prior to founding NCA, from 1986 to 1992, Mr. Creswell was a vice-president in the corporate finance and investment banking group of Bankers Trust Co. in New York.
Mr. Creswell earned a bachelor of arts degree in business administration from the University of Puget Sound in 1982. Mr. Creswell began his career as a certified public accountant with Arthur Young & Company in Denver, Colo. After practising for three years, he attended business school at the Amos Tuck School of Business at Dartmouth, where he earned a master of business administration degree in 1987.
On closing of the acquisition, Ms. Creswell will resign as an officer but will remain as a director of the corporation.
John Jacobs -- proposed director
Mr. Jacobs is the chief executive officer and has been a director of the corporation since October, 2011. Mr. Jacobs is also a partner with NCA. At NCA, Mr. Jacobs is involved with the corporation's organization activities and serves on the board of directors of NCSG. Mr. Jacobs is a member of the board of directors of Warwick & Kent Holding, a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry. Mr. Jacobs previously has served on the board of directors of numerous private companies, and was a board member and the chair of the compensation committee, and member of the audit committee of Fuel Systems Solutions Inc., a Nasdaq-listed public company, between 2004 and 2007.
Prior to joining NCA, Mr. Jacobs spent 23 years in investment banking and commercial banking in New York and Seattle. For more than 15 years, Mr. Jacobs worked for Piper Jaffray & Co., a New York Stock Exchange publicly listed investment banking firm. For more than 10 years, Mr. Jacobs led Piper Jaffray's Seattle-based investment banking practice and founded the firm's global technology practice. Prior to joining Piper Jaffray, Mr. Jacobs worked for the Chase Manhattan bank in New York, where he worked with the commercial bank as well as the investment bank.
Mr. Jacobs graduated with honours from Ohio Wesleyan University with a bachelor of arts degree in 1976 in addition to earning his master of international management degree from the Thunderbird School of Global Management in 1981. On closing of the acquisition, Mr. Jacobs will resign as an officer but will remain as a director of the corporation.
Trevor Haynes -- proposed chairman and director
Mr. Haynes is the chairman and a director of the corporation. From 2003 to present, Mr. Haynes has served as the president, chief executive officer and a director of Black Diamond Group Ltd., a modular building, remote lodging and energy services company headquartered in Calgary, Alta., listed on the TSX. From February, 2007, to October, 2009, Mr. Haynes was also a director of Aqueous Capital Corp., a former capital pool company listed on the TSX Venture Exchange. From January, 2003, to May, 2005, he was the president and chief executive officer of Kettleby Investment Management, a private holding company involved in construction and real estate development. From February, 1992, to December, 2002, he held various positions of increasing responsibility with Atco Structures & Logistics Ltd., a company that at the time was primarily involved in modular structures and remote accomodations. Mr. Haynes is currently a director of NCSG, Petroleum Services Association of Canada and the Fig Tree Foundation.
Mr. Haynes graduated from the University of Toronto with a bachelor of arts degree in 1991.
Don Basnett -- proposed director
Mr. Basnett is a director of the corporation. Mr. Basnett has over 38 years of experience in providing electrical/instrumentation maintenance and construction services during his tenure as the president and chief executive officer of Pyramid Corp., a privately owned company offering products and services to companies in the petroleum, petrochemical, mining, wood products, agricultural and industrial sectors. Mr. Basnett currently serves as a member of the board of directors of NCSG and of Warwick & Kent Holdings, a private Alberta-based steel fabrication and industrial structures company serving the Western Canadian energy industry.
Darin Coutu -- proposed director
Mr. Coutu is a director of the corporation. Mr. Coutu is a chartered accountant with over 22 years experience, including nine years in senior leadership roles with publicly traded companies. Currently, Mr. Coutu is the chief financial officer for NCSG, a crane and heavy haul company based in Edmonton, Alta., serving the refining, oil and natural gas, and wind energy sectors in Western Canada and the northwestern United States. NCSG owns and operates Northern Crane, Mullen Crane & Transport and TransTech, a heavy haul trucking company. From October, 2007, to December, 2010, Mr. Coutu acted as chief financial officer of ZCL Composites Inc., a designer, manufacturer and supplier of cost-effective fibreglass tank systems to the petroleum industry which trades on the TSX under the symbol ZCL. From July, 2005, to October, 2007, he served as the chief financial officer of Rentcash Inc., a provider of alternative financial products and services. Mr. Coutu also held the position of chief accountant with Canadian Western Bank from January, 2003, to July, 2005, and was with the accounting firm of KPMG LLP from December, 2000, to December, 2002, as a senior principal with the firm.
Mr. Coutu graduated from the University of Alberta with a bachelor of commerce degree in 1989 and also earned his chartered accountant designation in Alberta in 1992. Mr. Coutu has also served as director of non-profit organizations, including Junior Achievement.
Rob Hunt -- proposed director
Mr. Hunt is a director of the corporation. Mr. Hunt is a retired business executive with over 33 years experience in management, senior leadership roles and strategy development with both private and public resource companies in Canada and the United States. He is currently a director of Northwestel, a wholly owned subsidiary of Bell Canada. Mr. Hunt is also a director and chairman of Golconda Resources Ltd. and sits on a number of advisory boards for private companies. Prior to retiring at the end of 2008, Mr. Hunt was the president of Horizon North Logistics Inc., a remote resource development service company that provides work force accommodation solutions, camp management and catering services, and road and access matting solutions. From 1988 to 2006, he was the senior vice-president of Akita Drilling Ltd.
Darrell Peterson -- proposed director
Mr. Peterson is a director of the corporation. He is a partner with Bennett Jones LLP, an international business law firm specializing in energy and corporate law. Mr. Peterson's practice is focused on corporate and securities law, with a specialization in mergers and acquisitions, corporate reorganizations, and public and private financings. His practice involves acting for public and private issuers, private equity participants, and institutional investors. He also advises issuers on the structuring and implementation of corporate governance practices.
Mr. Peterson has a bachelor of law degree from Queen's University, a master of science and bachelor of science from the University of Alberta, and an ICD.D designation from the Institute of Corporate Directors. He also serves as corporate secretary for several publicly listed issuers and as a director of a number of private companies.
Edward Redmond -- proposed director
Mr. Redmond is a director of the corporation. Mr. Redmond is the president, chief executive officer and a director of NCSG, a crane and heavy haul company based in Edmonton, Alta., serving the refining, oil and natural gas, and wind energy sectors in Western Canada and the northwestern United States. NCSG owns and operates Northern Crane, Mullen Crane & Transport and TransTech, a heavy haul trucking company. Mr. Redmond has more than 25 years of operating, transactional and business advisory experience in the crane, transportation, energy and utilities industries.
For the last 14 years, Mr. Redmond has held senior leadership roles including as the president, chief executive officer and executive vice-president for a number of private and public organizations including: executive vice-president of the energy products and services segment of McCoy Corp., a company listed on the TSX that provides equipment and services to the upstream oil and natural gas industry, from November, 2006, to August, 2010; investment banking partner specializing in turnaround management, and sell-side mergers and acquisitions for Kirchner & Company, a private company focused on providing advice to the private equity owners of businesses looking to improve and/or sell the businesses they owned, from September, 2004, through November, 2006; chief executive officer of Lacent Technologies, a private company that designed, manufactured and sold laser cutting equipment for the automotive and garment industries, from March, 2003, to September, 2004, taking the company through a sale process and selling to Lectra SA based in France; and president of Surface Engineered Products, a private company that designed and provided specialized coatings for petrochemical companies and other industries, from January, 1997, through March, 2003.
Mr. Redmond obtained a master of business administration degree from the Stanford Business School in 1990, a master of science degree in engineering from the University of Toronto in 1985 and a bachelor of science degree in engineering from the University of Alberta in 1983.
Arm's-length transaction
The acquisition will be an arm's-length transaction as none of the directors, officers or insiders of the corporation own any securities of the NEC Group or CRC. The acquisition will not be subject to approval of the shareholders of the corporation.
Regulatory matters
The corporation will apply for an exemption from sponsorship requirements pursuant to TSX-V Policy 2.2. There is no assurance, however, that it will obtain this exemption. Trading in the common shares will remain halted until such time as the exchange has received the documentation required by Policy 2.4. Completion of the acquisition is subject to a number of conditions including, but not limited to, exchange acceptance and if applicable pursuant to exchange requirements, majority of the minority shareholder approval. Where applicable, the acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the acquisition will be completed as proposed or at all.
We seek Safe Harbor.