/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
NISKU, AB, April 3, 2017 /CNW/ - Hyduke Energy Services Inc.
("Hyduke" or the "Company") is pleased to announce
that it has entered into a Share Purchase Agreement (the
"Agreement") to purchase (the "Acquisition") all of
the issued and outstanding shares of Avalanche Metal Industries
Ltd. ("Avalanche"), a private corporation engaged in the
business of structural steel manufacturing, including production
tanks, steps and ladders for production tanks and other equipment
for industries including the oilfield and forestry. Based in
Kelowna, B.C., Avalanche is a low
cost manufacturer of structural steel products ideally located in
central B.C. to support Hyduke's expansion into new markets.
The Acquisition is expected to close on April 4, 2017, or such later date which may be
agreed, with an outside date of April 30,
2017. The consideration is cash but immaterial, and further
particulars of the Acquisition are available in the Corporation's
Material Change Report filed today. The Acquisition supports
Hyduke's stated strategy to expand beyond the fabrication and
support of drilling and well servicing rigs and related oilfield
services equipment to become a diversified designer, fabricator and
manufacturer of equipment required for the drilling, completion,
production and maintenance of upstream oil, natural gas and natural
gas liquids.
Completion of the Acquisition is subject to the fulfillment of
certain conditions typical to a transaction of this nature.
Patrick F. Ross, Director and
Chief Executive Officer of the Corporation, is also a director and,
through his wholly-owned corporation, 1017348 Alberta Ltd.
("1017348"), a shareholder of Avalanche, and therefore, the
Acquisition constitutes a "Related Party Transaction" within the
meaning of Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI
61-101") insofar as it relates to Mr. Ross only. 1017348 owns
40 Class "A" Voting Non-Participating and 40 Class "C" Non-Voting
Common Shares of Avalanche. On closing of the Acquisition,
1017348 will be paid an aggregate of $75,000 for its Avalanche Shares.
Subsequent to closing, the purchase price for the Avalanche Shares
may be adjusted upward or downward based on a reconciliation of the
net book value of the Avalanche assets. Based on information
currently in the Corporation's possession, any upward increase in
the purchase price is not anticipated to exceed 10% of the
aggregate amount that 1017348 was paid for its Avalanche Shares on
closing. There are no other "related parties" in connection with
the Acquisition.
The Corporation is relying on the formal valuation and minority
approval exemptions of subsections 5.5(a) and 5.7(1)(a) of MI
61-101 as neither the fair market value of the subject matter of,
nor the fair market value of the consideration for, the Related
Party Transaction exceeds 25% of the Corporation's market
capitalization. The Acquisition was approved by the independent
directors of the Corporation and Mr. Ross did not participate in
the discussions or the vote of the board relating to such
approval.
Note Respecting Material Change Report Filing
The Acquisition is expected to close on or about April 4, 2017. The material change report in
respect of the Acquisition is being filed less than 21 days before
the expected date of the closing of the Acquisition. Due to
the simplicity of the Acquisition, there being no requirement for
approval by the Corporation's shareholders, the business desire to
rapidly integrate Avalanche into the Corporation's business, and
the de minimis nature of the related party element of the
Acquisition, the Corporation believes that such filing period is
reasonable.
Forward looking information
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information or
statements. More particularly and without limitation, this
news release contains forward-looking statements and information
relating to the expected completion of the Acquisition and the
expected benefits accrued to the Corporation upon completion of the
Acquisition. These forward-looking statements and information
are based on certain key expectations and assumptions made by the
Corporation. Completion of the Acquisition is subject to a number
of conditions which are typical for transactions of this
nature. Assumptions have been made with respect to the
satisfaction of all conditions precedent under the Agreement and
general assumptions respecting the business and operations of both
the Corporation and Avalanche, including that Avalanche will
continue to operate in a manner consistent with past practice and
pursuant to certain industry and market conditions. Although
the Corporation believes that the expectations and assumptions on
which such forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the
forward-looking statements and information as the Corporation
cannot give any assurance that they will prove to be correct.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, the
failure to satisfy any of the conditions to completion of the
Acquisition, and the business, operational and/or financial
performance of Avalanche may be materially different from that
currently anticipated. Readers are cautioned that the foregoing
list of risks and uncertainties is not exhaustive. Other risk
factors that could affect the Corporation's operations or financial
results are included in the Corporation's annual information form
and may be accessed through the SEDAR website
(www.sedar.com). The forward-looking statements and
information contained in this news release are made as of the date
hereof and the Corporation does not undertake any obligation to
update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities
laws.
You should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. While the Company may elect to, the Company is under no
obligation and does not undertake to update this information at any
particular time, except as required by law.
The TSX has neither reviewed nor approved this
release.
SOURCE Hyduke Energy Services Inc.