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12/13/2007 Clearford Industries Inc. Terms of Conditional Offer to Acquire an Ontario Based Precast Concrete Manufacturer. Ottawa, Ontario – (December 13, 2007) - Clearford Industries Inc. (“Clearford”, TSX-V: CLI) announced today that an Ontario based concrete manufacturer (the “Vendor”), and Clearford have advanced their due diligence pertaining to a conditional offer entered into between the parties on November 12, 2007 (the “Agreement”) whereby Clearford is to acquire all of the Vendor’s issued and outstanding shares or assets. The target date for completion of the acquisition is January 31, 2008. The name of the Vendor has been omitted at the request of the Vendor for competitive marketing and business reasons. The Vendor wishes to preserve confidentiality of the transaction until a definitive agreement has been entered into. Clearford will purchase all of the issued and outstanding shares or assets of the Vendor, an Ontario corporation, for a total purchase price of approximately $22 million (the “Purchase Price”), subject to the provisions of the Agreement. The Purchase Price is to be paid by way of a $5 million secured promissory note and the remainder in cash at the time of closing. For the year ending December 31, 2007, the Vendor is projecting revenues in excess of $16 million, net income before taxes in excess of $4 million and EBITDA in excess of $4.5 million. If successful in the acquisition, it is anticipated that Clearford’s annual EBITDA will increase in excess of $4.5 million. For Clearford, EBITDA represents earnings before interest, taxes, depreciation and amortization and is used to analyze the profitability of the Brooklin Concrete Division before certain non-operating and non-cash charges. EBITDA is a non-GAAP financial measure which does not have a standardized meaning as prescribed by GAAP. The purchase is conditional on Clearford obtaining the required financing of the Purchase Price. It is anticipated that this financing may involve both debt and equity elements and may result in a change of control. There are currently 25,706,165 Clearford common shares issued and outstanding, with an additional 31,250,000 shares issuable upon conversion of all outstanding convertible securities of Clearford and an additional 3,590,808 shares issuable upon vesting and exercise of outstanding stock options and warrants. The closing of the acquisition is subject to: (1) the satisfactory results of a due diligence inspection by Clearford and the making of any agreed upon adjustments to the Purchase Price reflecting the assets, liabilities (both known and contingent), finances and business operations of the Vendor; (2) the ability of Clearford to secure adequate financing to acquire the shares or assets for the Purchase Price and adequately capitalize the business to operate the Vendor’s business; (3) consent of HSBC Bank Canada and the holders of the secured convertible debentures of Clearford; and (4) other customary conditions to closing as required in a transaction of this type. The above-mentioned transaction is a material acquisition by Clearford that could result in a change of control of Clearford and because of this may be treated as a reverse take-over transaction (an “RTO”) for the purposes of applicable securities laws and the policies of the TSX Venture Exchange (the “Exchange”). At this time Clearford does not anticipate that the transaction will result in a change of control. The Vendor is an Ontario corporation with assets in one location in Ontario. The Vendor is a manufacturer of concrete products and has customers and distributors in Canada and the US. The addition of the Vendor’s business to Clearford’s Concrete Division builds on Clearford’s strategy of consolidation of the wet cast segment of the pre-cast concrete market through acquisition Certain information included in this press release is forward-looking and may involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with Clearford’s growth, regulatory risks, intellectual property infringement and other factors. Unless otherwise required by applicable securities laws, Clearford disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about potential factors that could affect Clearford’s financial and business results is included in public documents Clearford files from time to time with Canadian securities regulatory authorities. Completion of the transaction is subject to a number of conditions, including Clearford Board approval, Exchange acceptance and potentially disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular and/or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of Clearford should be considered highly speculative. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. About Clearford Industries Inc. For more information contact: |
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