NANAIMO, BC, Nov. 24, 2021 /CNW/ - Atlas Engineered Products
("AEP" or the "Company") (TSXV: AEP) (OTC Markets: APEUF) announced
today that the Company has entered into a non-binding letter of
intent ("LOI") with the shareholders of a truss manufacturing
company located in British Columbia,
Canada (the "Target") to acquire all of the issued and
outstanding shares of the Target (the "Proposed Transaction").
AEP is looking to expand its footprint in British Columbia where seasonality and the
effects of winter are not as impactful as the rest of Canada. "We are excited to announce the
signing of this LOI. We have been fairly quiet on the merger
and acquisition front while focusing on profitability and organic
growth and now is the time to move forward with this strategic
acquisition," said Hadi Abassi, AEPs CEO, President and Founder.
"The Target will fit in nicely to our overall strategic goals and
we are excited for them to potentially join the AEP group of
companies."
Under the terms of the non-binding LOI, AEP intends to acquire
all of the issued and outstanding shares of the Target for a
proposed purchase price of $5.8
million in cash, plus a working capital adjustment to be
determined and finalized within 60 days of closing of the Proposed
Transaction. In addition, AEP intends to acquire the land and
buildings on which the Target's facilities are located for an
estimated price of $2.7 million, also
to be acquired for cash, subject to the completion of an
independent appraisal. The Target has earned average revenues of
approximately $4.6 million for the
last three years, with an average normalized EBITDA margin of 24%.
AEP believes it will have sufficient acquisition financing
available through the Company's existing banking relationships and
is currently assessing the most advantageous use of debt versus
internally generated cash.
Closing of the Proposed Transaction remains subject to a number
of conditions, including satisfactory completion by the Company of
its due diligence investigation, the execution of a binding
definitive agreement, and the approval of the TSX Venture Exchange
(the "Exchange"), if such approval is required under the rules and
policies of the Exchange.
About Atlas Engineered Products Ltd.
AEP is a growth company that is acquiring and operating
profitable, well-established operations in Canada's truss and engineered products
industry. We have a well-defined and disciplined acquisition and
operating growth strategy enabling us to scale aggressively and
apply new technologies, giving us a unique opportunity to
consolidate a fragmented industry of independent operators.
Forward Looking Information
Information set
forth in this news release contains forward-looking statements.
These statements reflect management's current estimates, beliefs,
intentions and expectations; they are not guarantees of future
performance. Although AEP believes that the expectations reflected
in the forward looking statements are reasonable, there is no
assurance that such expectations will prove to be correct, or that
such future events will occur in the disclosed time frames or at
all. AEP cautions that all forward looking statements are
inherently uncertain and that actual performance may be affected by
a number of material factors, many of which are beyond AEP's
control. Such factors include, among other things: Risks and
uncertainties relating to AEP, including those to be described in
the Management's Discussion and Analysis ("MD&A") for AEP's
three and nine months ended September
30, 2021. Accordingly, actual and future events,
conditions and results may differ materially from the estimates,
beliefs, intentions and expectations expressed or implied in the
forward-looking information. Except as required under applicable
securities legislation, AEP undertakes no obligation to publicly
update or revise forward-looking information.
Readers are cautioned that the financial results of the
Target were prepared by management, and have not been audited by an
independent auditor.
NON-GAAP/NON-IFRS FINANCIAL MEASURES
Certain
financial measures in this news release do not have any
standardized meaning under IFRS and, therefore are considered
non-IFRS or non-GAAP measures. These non-IFRS measures are used by
management to facilitate the analysis and comparison of
period-to-period operating results for AEP and to assess whether
AEP's operations are generating sufficient operating cash flow to
fund working capital needs and to fund capital expenditures. As
these non-IFRS measures do not have any standardized meaning under
IFRS, these measures may not be comparable to similar measures
presented by other issuers. The non-IFRS measures used in this news
release may include "EBITDA", "EBITDA margin", "adjusted EBITDA",
"adjusted EBITDA margin", "normalized EBITDA" and "normalized
EBITDA margin". "EBITDA" is calculated as revenue less operating
expenses before interest expense, interest income, amortization and
depletion, impairment charges, and income taxes. "EBITDA margin" is
EBITDA expressed as a percentage of revenues. "Adjusted EBITDA" is
EBITDA after adjusting for share-based payments, foreign exchange
gains or losses and non-recurring items. "Adjusted EBITDA margin"
is adjusted EBITDA expressed as a percentage of revenues.
"Normalized EBITDA" is EBITDA adjusted for one-time items.
"Normalized EBITDA margin" is normalized EBITDA expressed as a
percentage of revenues.
NEITHER THE 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.
SOURCE Atlas Engineered Products Ltd.