RE:RE:RE:RE:RE:RE:I'm guessing they've made another acquisitionST. ALBERT, AB, Dec. 4, 2013 /CNW/ - Enterprise Group, Inc. ("Enterprise," or
the "Company") (TSX:E) is pleased to announce that it has entered into an
agreement (the "Acquisition Agreement") to acquire Hart Oilfield Rentals Ltd.
("Hart"), one of Western Canada's most highly regarded oilfield service
providers, for a purchase price of $22.6 million, which includes $2.0 million of
working capital (the "Acquisition"). The purchase price will be satisfied
through a combination of $1.0 million of common shares ("Common Shares") of
Enterprise and $21.6 million in cash.
HIGHLIGHTS
* Complementary acquisition with significant customer overlap
* Expands the Company's specialized rental equipment segment and enhances growth
potential
* Hart boasts an attractive track record of organic growth - realized Compound
Annual Growth Rates ("CAGR") on revenue of 22% and EBITDAS of 37%, over the last
four years
* Purchase price represents a trailing EBITDAS multiple of 3.1x (2.9x without
working capital), based on Hart's fiscal 2013 EBITDAS of $7.2 million, and a
trailing revenue multiple of approximately 1.0x, based on Hart's fiscal 2013
revenue of $22.7 million
* Purchase price is equivalent to 1.1x the fair market value of Hart's
equipment, based upon an independent appraisal completed in May of 2013
* In order to finance the cost of the Acquisition, the Company intends to
conduct a prospectus offering of subscription receipts for gross proceeds of $15
million
* Purchase will also be facilitated by recent $15 million increase in the
Company's credit facility (See press release dated November 20, 2013)
Hart is a full service oilfield site infrastructure company that provides both
site services and equipment rentals to its oil and gas customers, all of whom
operate within the Western Canadian Sedimentary Basin. Hart's equipment fleet
consists of approximately 1,500 owned pieces and an additional 500 pieces that
have been rented in order to fulfill demand. This fleet provides on-site support
for oilfield drilling and completion operations, and includes both traditional
well site equipment (well site trailers, medical facilities, sewage treatment
and fire suppression systems, scaffolding, etc.) and Hart's proprietary 'combo'
equipment, innovative modular designs that are both easily portable and fulfill
multiple functions, creating significant benefits for customers' operational
efficiency.
Hart both designs and manufactures its 'combo' equipment, and currently
possesses 14 pending patents on its industrial modular design assets. These
offerings provide Hart with a unique competitive advantage. This advantage is
further leveraged by Hart's commitment for exceptional service. Hart works with
each of its customers throughout the order process, employing proprietary
three-dimensional planning software to ensure that the correct equipment is
located in the correct position for maximizing site efficiency. The combination
of Hart's proprietary equipment designs and dedication to service have earned
Hart a sterling reputation, and have allowed it to develop an enviable list of
high-quality clients.
Hart generated $22.7 million of revenue and $7.2 million of EBITDAS in its most
recent fiscal year, which concluded on April 30, 2013, and has grown revenue and
EBITDAS at CAGRs of 22% and 37%, respectively, over the past four years.
Contingent upon the successful completion of the acquisition, Enterprise
anticipates increasing the 2014 capital expenditure budget of Hart by $9.4
million for the deployment new modular units. The Company estimates that a full
year's deployment of these new units could increase Hart's annual revenue and
EBITDAS to $29.9 million and $12.0 million, respectively.
Hart currently operates from six strategic locations - five in Albertaand one in
British Columbia. Enterprise intends to complement these locations by opening up
a new Hart office in Fort St. John, British Columbia, which will also house
divisions of Artic Therm and CalgaryTunnelling & Horizontal Augering Ltd., the
Company's existing businesses. The vendors under the Acquisition Agreement will
sign two-year management agreements with Enterprise. It will also be a condition
of the Acquisition Agreement that Hart's key employees will sign five-year
employment agreements.
"We are very pleased to announce this acquisition, which we believe will create
both near and long-term benefits for our business," stated Leonard D. Jaroszuk,
Enterprise's President and Chief Executive Officer. "We expect the addition of
Hart will be immediately accretive. When taking into account the anticipated
benefit of investing in new modular units, Enterprise expects that the
acquisition will provide a benefit of approximately $0.07 to Enterprise's
earnings per share in fiscal 2014, based upon Hart's trailing earnings."