Petrowest Energy Services Trust (Petrowest or the Trust) (TSX - PRW.UN) nnounced today that it has entered into agreements to acquire five private road construction, gravel crushing and log hauling businesses in the Grande Prairie and Peace River regions of Alberta and the Ft. St . John region of British Columbia for an aggregate purchase price of approximately $94.2 million. The revenue generated by these companies over their last fiscal year totaled approximately $76.6 million. These
acquisitions will expand the Trusts geographic footprint, client base and
provide increased utilization of assets within the Trust. In addition Petrowest also announced that it has also entered into a memorandum of understanding with the Woodland Cree First Nations (WCFN) that contemplates a major strategic alliance, structured as a joint venture, which will see Petrowest provide a combination of services within the WCFN traditional lands comprising over 3,800 square miles, including a significant portion of the Peace River oil sands. This memorandum of understanding also contemplates that Petrowest will acquire road construction equipment from a subsidiary of the WCFN for a purchase price of $4.0 million.
Taken together, these acquisitions significantly enhance Petrowests existing infrastructure business and provide access to a significant portion of the expansion activities associated with the Peace River Oil Sands development.
The maximum total purchase price for the acquisitions will be approximately $94.2 million, comprised of the payment of $50.4 million in cash, the issuance of approximately 4.3 million trust units of Petro west and the assumption of $10.3 million of debt of the companies (assuming a trust unit price of $7.75). The effective total purchase price is reduced by changes in working capital for the period from January 1, 2007 to closing which accrue to the benefit of Petrowest. In addition, the terms of the agreements require minimum working capital on the acquisitions to be approximately $11.1 million
in the aggregate. It is estimated that actual cash balances acquired on closing will be in excess of $6.0 million.
More : cnw.ca
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Fax: 2467378
Email: mtech_coordinator@yahoo.com
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