WesternOne Inc. Announces $35.0 Million Bought Deal Financing and Strategic Growth Initiatives

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VANCOUVER, Sept. 9, 2014 /CNW/ - WesternOne Inc. ("WesternOne") (Toronto Stock Exchange: WEQ, WEQ.DB and WEQ.DB.C) today announced that it has entered into an agreement with a syndicate of underwriters co-led by Canaccord Genuity Corp., National Bank Financial Inc. and Raymond James Ltd. (together, the "Underwriters"), pursuant to which WesternOne will issue, and the Underwriters shall purchase on a "bought-deal" basis, 4,375,000 common shares (the "Common Shares"), at a price of $8.00 per Common Share (the "Offering Price") for gross proceeds of $35,000,000 (the "Offering").

WesternOne intends to use the net proceeds of the Offering to: (i) partially fund the acquisition of the business and assets of Enerbuilt Technologies Inc. ("Enerbuilt"), a Western Canadian based business that supplies heating equipment and services to the oil & gas industry and other markets in Western Canada; (ii) increase WesternOne's indirect ownership of Britco Structures USA LLC ("Britco USA"), a Texas-based company which conducts the design and manufacturing 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, from 44.55% to 64.55%; (iii) deploy additional capital towards WesternOne's capital expenditure program; and (iv) fund working capital and general corporate purposes.

Acquisition of Enerbuilt

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 (the "Enerbuilt Acquisition"). 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 ended June 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. Britco USA 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 across Western 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." 

WesternOne has granted the Underwriters an over-allotment option to purchase up to an additional 656,250 Common Shares, representing 15% of the Offering. The over-allotment option may be exercised in whole or in part at any time for a period of up to 30 days following closing of the Offering, to cover over-allotments, if any.

Closing of the Offering is expected to occur on or about September 25, 2014. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Common Shares will be offered in each of the provinces of Canada other than Quebec by way of a short form prospectus and may also be distributed in the United States on a private placement basis in compliance with the exemption from registration provided by Rule 144A under the United States Securities Act of 1933, as amended (the "U.S. Securities Act").

This press release shall not constitute an offer to sell or a solicitation of any offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold within the United States absent registration under the U.S. Securities Act or an applicable exemption from the registration requirements thereunder.

Non-IFRS Measures

"Adjusted EBITDA" is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. "Adjusted EBITDA" refers to net income (loss) before interest, taxes, depreciation, amortization, gain/loss on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, business acquisition costs, debenture issuance costs, gain/loss on debentures relating to changes in their fair values, share based compensation, foreign exchange gains/losses, restructuring costs, and write-down of capital assets, intangible assets and goodwill. For a full description of adjusted EBITDA, refer to "Non-IFRS Measures" in WesternOne's Management's Discussions & Analysis dated August 7, 2014.

Forward-looking Information

Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the filing of a preliminary short form prospectus, the closing of the Offering and the over-allotment option, the use of net proceeds of the Offering, the funding allocation in relation to the Enerbuilt Acquisition, the closing of the Enerbuilt Acquisition, the benefits arising from the Enerbuilt Acquisition including the anticipated accretion to WesternOne's shareholders based on Enerbuilt's historical adjusted EBITDA for the year ended June 30, 2014, the closing of the Britco USA Acquisition,  the anticipated funding of the Additional WIS CAPEX, and WesternOne's strategy to deploy capital and related acquisitions and generate value to investors. Actual events or results may differ materially.

Forward-looking information contained in this press release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the ability of WesternOne to obtain all required regulatory and Toronto Stock Exchange approvals in connection with the Offering and the Enerbuilt Acquisition, the outlook of WesternOne's business and the economy in Western Canada and the US, the supply and demand for WesternOne's products and services, stability in oil and gas activity in Western Canada and the US, and management's assessment of future plans and operations. Although the forward-looking information contained in this press release is based upon what the WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 28, 2014 and Management's Discussion and Analysis dated August 7, 2014, which are available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this press release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate stable and growing dividends to its shareholders and to achieve capital appreciation.

Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

About Britco

With over 700 employees, Britco is the one of the largest providers of temporary and permanent residential and commercial modular buildings in North America and has one of the largest lease fleets of office complexes, construction site offices and storage containers in Western Canada. Britco has four manufacturing facilities located in Canada and the United States: two in British Columbia, one in Alberta, and one in Texas. Britco is a leading design-builder of a wide range of innovative modular buildings for companies in the construction, energy and resource sectors in Western Canada and the United States.

Additional information about Britco is available at www.britco.com.

About WesternOne Infrastructure Services

WesternOne Infrastructure Services ("WIS") specializes in providing: (i) construction heat and related services; and (ii) aerial equipment for construction, television and movie production. WIS has 16 locations in British Columbia and Alberta serving markets in major cities.

Additional information about WIS is available at www.westernone.ca

Trading Symbols

Toronto Stock Exchange: WEQ, WEQ.DB and WEQ.DB.C

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

SOURCE WesternOne Inc.