Aveda Transportation and Energy Services Inc. (“Aveda” or the
“Company”) (TSX-V:AVE), one of North America’s largest dedicated
rig moving companies, today announced that it has entered into an
arrangement agreement (the “Arrangement Agreement”) with Daseke,
Inc. (“Daseke”) (NASDAQ:DSKE), a leading consolidator and the
largest owner of flatbed and specialized transportation and
logistics solutions in North America, under which Daseke will
acquire all of the issued and outstanding common shares of Aveda
(including any common shares issued pursuant to stock options or
other convertible securities which are exercised immediately prior
to closing) for CAD $0.90 per Aveda common share or 0.0751 Daseke
common shares for each Aveda common share held by the Aveda
shareholder and an additional earnout of up to CAD $0.45 per Aveda
common share (if any, the “Earnout”) contingent on Aveda achieving
certain EBITDA targets (the “Transaction”).
“Daseke has a history of consolidating top-tier
companies in the transportation and logistics space,” said Ronnie
Witherspoon, President and Chief Executive Officer at Aveda. “Given
their scale, along with Aveda’s assets, including our highly
experienced team, and our top-of-the-line equipment, we believe we
will together create a stronger oilfield services platform. They
are strategic in their acquisitions and in addition to revenue and
operating synergies, they recognize the opportunity in Aveda to
provide the size and scale needed to grow their operations in rig
moving and heavy haul services.”
“At a 78% premium to Aveda’s 10-day weighted
average share price of CAD $0.5063 per common share ended April 9,
2018, we feel the offering of $0.90 per Aveda common share reflects
the long-term value of our portfolio of assets,” said Bharat
Mahajan, Chief Financial Officer and Vice President Finance at
Aveda. “At this valuation, Aveda’s shareholders are provided the
opportunity to realize immediate value and also participate in
Aveda’s growth initiatives over the next 15 months with less
risk.”
Under the terms of the Transaction, Aveda
shareholders have three options:
- Share-for-share – Aveda’s shareholders can choose to receive
0.0751 Daseke common shares for each Aveda common share held by the
shareholder. The Daseke common share price has been determined
using the 10-day volume-weighted average trading price on The
Nasdaq Stock Market ending on April 9, 2018.
- All-cash – Aveda’s shareholders can choose to receive CAD $0.90
in cash per Aveda common share.
- Combination of cash and shares – Aveda shareholders may choose
a combination of cash and Daseke common shares.
In addition, regardless of the choice of
consideration elected, the Company’s shareholders as at the
effective date of the close of the Transaction, may be entitled to
receive an additional cash payment approximately 14 months from the
close of the Transaction. See “Earnout” below.
“I am truly excited to have Aveda join the
Daseke family,” said Don Daseke, Chairman and Chief Executive
Officer at Daseke. “Aveda is a great company with quality people, a
specialized value-additive business and a blue-chip customer base.
This merger is a strong fit for our company and shareholders as
Aveda has demonstrated the ability to outpace their market’s growth
rate. We expect joining Daseke will provide Aveda the necessary
backing and capital to fuel their continued strong
performance.”
“We could not have asked for a better company to
continue to provide our customers with high-quality service and
equipment,” added David Werklund, Executive Chairman at Aveda. “In
addition, Daseke has demonstrated its commitment to growing
shareholder value. In an increasingly competitive operating
environment, they have steadily grown revenues from $30 million in
2009 to approximately pro forma $1.2 billion in 2017. They are a
high-quality company with a long-term growth platform we think will
be beneficial to Aveda’s shareholders.”
Fairness Opinion
Canaccord Genuity Corp. has provided the Aveda
Board of Directors with its verbal opinion that, subject to the
assumptions, qualifications and limitations contained therein, the
consideration to be received by holders of Aveda common shares
pursuant to the terms of the Arrangement Agreement is fair, from a
financial point of view, to the holders of Aveda common shares.
Recommendations
Aveda’s Board of Directors and management are
unanimously in support of the Transaction and have recommended
shareholders vote in favour of the Transaction. Werklund Capital
Corporation and Werklund Ventures Ltd. along with all members of
Aveda’s Board of Directors and management have entered into
customary lock-up agreement with Daseke and will unanimously vote
in favour of the Transaction. In aggregate, Aveda shareholders
holding approximately 27% of the outstanding Aveda common shares
(on an undiluted basis) have signed lock-up agreements in support
of the Transaction.
Approvals and Shareholder
Meeting
The Transaction is subject to customary closing
conditions including receipt of regulatory, TSX Venture Exchange,
court and Aveda shareholder approvals. A special meeting of
shareholders is expected to be held on or about June 7, 2018, to
vote on the resolution approving the Transaction.
Under the terms of the Arrangement Agreement,
the Transaction will be effected by way of a plan of arrangement of
Aveda under the Business Corporations Act (Alberta). The
Transaction will require approval by at least 66 2/3 percent of
holders of Aveda common shares at a special meeting to be called to
consider the Transaction, as well as approval by a simple majority
of the votes cast by the holders of Aveda common shares excluding
the votes cast by such holders of Aveda common shares who are
entitled to receive, directly or indirectly, a "collateral benefit"
and whose votes are required to be excluded under Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions.
Arrangement Agreement
The Arrangement Agreement contains customary
terms and conditions for a transaction of this nature, including a
prohibition upon Aveda from soliciting or initiating any discussion
concerning any other business combination or similar transaction,
subject to compliance with fiduciary duties, the right of Daseke to
match any unsolicited superior proposal received by Aveda, and a
termination fee will be payable to Daseke if Aveda receives and
accepts an unsolicited superior proposal. See also “Earnout”
below.
Complete details of the terms of the Transaction
are set out in the Arrangement Agreement, which will be filed and
available for viewing on SEDAR under Aveda’s profile at
www.sedar.com.
Earnout
Under the terms of the Earnout, subject to
certain conditions contained in the Arrangement Agreement,
shareholders of Aveda of record as of the effective date of the
Transaction (excluding dissenting shareholders) will be entitled to
receive a pro rata share of the amount (if any) by which Aveda’s
EBITDA for the specified period (being June 1, 2018 to May 31, 2019
(or if the parties to the Arrangement Agreement mutually agree,
July 1, 2018 to June 30, 2019)) exceeds $18.0 million.
Subject to certain adjustments, the total amount payable is
to be calculated by multiplying 2.74737 by the difference of
Aveda’s EBITDA during the specified period and $18.0 million,
subject to a maximum payment of $0.45 per share and certain
adjustments. Any such amount would be payable in cash
approximately 14 months from the close of the
Transaction.
The terms of the Earnout should not be
construed as a financial projection and there is no guarantee that
any amount will become payable under the Earnout.
See “Forward-Looking and Cautionary Statements”
and “Non-IFRS Measures” below for further information regarding the
Earnout and the calculation of EBITDA.
About Daseke Inc.
Daseke, Inc. is a leading consolidator and the
largest owner of flatbed and specialized transportation and
logistics capacity in North America. Daseke offers comprehensive,
best-in-class services to many of the world’s most respected
industrial shippers through experienced people, more than 5,200
tractors, more than 11,000 flatbed and specialized trailers, and
million-plus square feet of industrial warehousing space. Daseke is
uniquely positioned as the largest carrier, yet has only a small
percent market share, of the highly fragmented flatbed and
specialized transportation market. For more information, please
visit www.daseke.com.
About Aveda Transportation and Energy
Services Inc.
Aveda provides specialized transportation
services and equipment required for the exploration, development
and production of petroleum resources in the Western Canadian
Sedimentary Basin and in the United States of America principally
in and around the states of Texas, Pennsylvania, Oklahoma, Ohio and
North Dakota. Aveda balances Performance, Safety and Value for our
Customers through Leadership, Financial Discipline and Proper
Planning, while providing a culture of Family for our employees.
Aveda strives for a world where its operations improve the daily
experience of our customers, our employees, and every person we
meet on the road to success.
Aveda was incorporated in 1994 as a private
company to serve the oil and gas industry. In the spring of 2006,
the Company went public on the TSX Venture Exchange. Aveda has
major operations in Leduc, AB, Grande Prairie, AB, Edson, AB,
Pleasanton, TX, Midland, TX, Pecos, TX, Marshall, TX, Williston,
ND, Williamsport, PA, Martins Ferry, OH and Oklahoma City, OK.
Aveda is publicly traded on the TSX Venture Exchange under the
symbol AVE. Aveda has 15 locations which cover North America’s most
prolific oil and gas plays. The Company has almost 1,500 pieces of
modern, well maintained equipment and employs approximately 610
team members. Aveda’s unique differentiator is our advanced
operational and safety culture. For more information on Aveda
please visit www.avedaenergy.com.
For more information, please contact:Bharat
Mahajan, CPA, CAVice President, Finance and Chief Financial
Officer(403) 264-5769bharat.mahajan@avedaenergy.com
Forward-Looking and Cautionary
Statements
This News Release contains certain
forward-looking statements and forward-looking information
(collectively referred to herein as “forward-looking statements”)
within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
“anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”,
“objective”, “continuous”, “ongoing”, “estimate”, “outlook”,
“expect”, “may”, “will”, “project”, “should”, “potential” or
similar words, including negatives thereof, suggesting future
outcomes. In particular, this News Release contains forward-looking
statements relating to the Transaction, including but not limited
to: the anticipated benefits of the Transaction to Aveda
shareholders, the date of the shareholder meeting being held in
connection therewith; that Aveda will be able to complete the
Transaction as expected or on the timeline expected; the amount of
consideration payable under the Transaction, and that Aveda will be
able to obtain all necessary court, shareholder and regulatory
approvals for the Transaction. Aveda believes the expectations
reflected in such forward-looking statements are reasonable as of
the date hereof but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon.
Forward-looking statements are not a guarantee
of future performance and involve a number of risks and
uncertainties, some of which are described herein. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Aveda’s actual performance
and financial results in future periods to differ materially from
any projections of future performance or results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the risk that the
Transaction is delayed or is not completed for any reason, the risk
that the anticipated benefits of the Transaction are not realized,
the risk that the Earnout does not become payable for any reason,
including the actual results of Aveda’s future operations, factors
beyond Aveda’s control, and the risks identified in Aveda’s
management discussion and analysis for the year ended December 31,
2017 (the “MD&A”), which are available for viewing on SEDAR at
www.sedar.com. In addition, the terms of the Earnout should not be
construed as a financial projection. There is no assurance
that any amount will become payable under the Earnout. Any
forward-looking statements are made as of the date hereof and,
except as required by law, Aveda assumes no obligation to publicly
update or revise such statements to reflect new information,
subsequent or otherwise.
This news release does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities
in the United States. The securities have not been and will not be
registered under the U.S. Securities Act or any state securities
laws and may not be offered or sold within the United States or to
U.S. Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
Non-IFRS Measures
This press release contains the term “EBITDA”
which does not have any standardized meaning prescribed by IFRS and
therefore may not be comparable with the calculation of financial
information of Aveda or similar measures for other entities. As
used herein, EBITDA is defined as Aveda’s net income (or loss)
(calculated in accordance with U.S. GAAP) before interest, income
taxes, depreciation, amortization and stock-based compensation for
the relevant period, subject to certain other additions and
reductions as described in the Arrangement Agreement.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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