ST. ALBERT, ALBERTA-(Marketwired - Oct. 15, 2014) - Enterprise Group, Inc. ("Enterprise," or the "Company") (TSX:E) is pleased to announce that the Company has completed its acquisition of Westar Oilfield Rentals Inc. ("Westar"). This acquisition was initially announced on July 31, 2014 in a press release entitled "Enterprise Group Announces LOI to Acquire Oilfield Site Services Company in Fort St. John, BC."
The final purchase price for the acquisition will be $13.5 million, which represents approximately a 3.3 multiple of Westar's EBITDA for the twelve-month period ended August 31, 2014. The purchase price will be satisfied through a combination of $10.0 million in cash, $2.0 million in Enterprise shares (2.5 million shares at a price of $.80 per share), and $1.5 million in vendor take-back financing, which will be paid over the next two years.
Westar is a highly-regarded full-service oilfield site infrastructure company that fulfills multiple equipment rental needs for a variety of oil and gas customers. This acquisition expedites Enterprise's plans to be operating three of its subsidiaries in Fort St. John by the conclusion of 2014. Westar's owner has also agreed to sign a five-year management agreement with the Company.
During the twelve-month period ended August 31, 2014, Westar generated revenues of approximately $8.7 million and EBITDA of approximately $4.1 million. Enterprise believes that synergies between Westar and the Company's existing subsidiaries will allow for both a rapid integration of this new business and the creation of significant operating efficiencies.
Westar's equipment fleet currently consists of nearly 400 owned pieces. Enterprise plans to devote approximately $3.0 million towards further expansion of this fleet.
"We are very pleased to complete our acquisition of Westar, which further establishes Enterprise's position as a central player within Western Canada's oilfield service industry," stated Leonard Jaroszuk, the Company's President and Chief Executive Officer. "Westar is in many ways similar Hart Oilfield Services, which has proven to be a major contributor to our business since its acquisition in January of 2014. Since that point, Hart has not only generated significant top-line growth, but also created of numerous cost-saving efficiencies. We anticipate that Westar will provide us with similar benefits, in addition to facilitating several new major client relationships. We will seek to both realize this benefits and cement these relationships as soon as possible by rapidly integrating this new business."
"Westar also provides Enterprise with a strong foothold in the Fort St. John region, the centre of Western Canada's burgeoning LNG industry," concluded Mr. Jaroszuk. "This acquisition provides us with a base of operations in Fort St. John, and we intend to further develop this base by opening local offices for three of our other subsidiaries by the conclusion of this year. As we have detailed in the past, the second half of 2014 is a very promising period for our business. The closing of this acquisition, the completion of our 2014 capital program, and our recent reception of Western Canada's first Direct Pipe System will all aid in our ability to deliver upon that promise."
Increased Finance Facility
Enterprise also announced that it has accepted a term sheet presented by PNC Bank Canada Branch to increase the Company's current senior secured finance facility to $45.0 million. This facility, will carry an interest rate of prime plus 1.5%, was previously increased from $20.0 million to $35.0 million in November of 2013.
About Enterprise Group, Inc.
Enterprise Group, Inc. is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries. The Company's focus is primarily construction services and specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management, and human resources to support continued growth. Enterprise acquired Artic Therm International Ltd. in September 2012, Calgary Tunnelling & Horizontal Augering Ltd. in June 2013, and Hart Oilfield Rentals in January 2014. More information is available at the Company's website, www.enterprisegrp.ca.
Forward Looking Information
Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
Non-IFRS Measures
The Company uses International Financial Reporting Standards ("IFRS"). EBITDA is not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-IFRS measure. This news release contains references to EBITDA. This non-IFRS measure used by the Company may not be comparable to a similar measure used by other companies. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA is calculated as net income excluding depreciation, amortization, interest and taxes.