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Atlas Engineered Products continues its aggressive acquisition program with Clinton Truss deal

The purchase includes 31,000 sq feet (sq ft) of plant, warehouse and office space on a five acre site
Atlas Engineered Products continues its aggressive acquisition program with Clinton Truss deal
Trussed up like a turkey? Not quite, this firm specialises in the wooden frameworks that support a roof

Wood product firm Atlas Engineered Products Ltd (CVE:AEP) has pressed on with its acquisition strategy and is now set to buy Ontario based Clinton Roof Truss Ltd for C$2.1mln in cash.

The purchase includes 31,000 sq feet (sq ft) of plant, warehouse and office space on a five acre site, positioned to provide access to the growing Ontario communities west of Mississauga.

Moreover, Clinton is growing, said  Atlas, and has over C$3 million in annual sales, strong profitability, and very capable operational leadership.

"The acquisition of Clinton represents a major milestone of our acquisition program to significantly broaden our geographic reach," said Guy Champagne, the president of Atlas.

"We are extremely pleased to be acquiring Clinton as it is highly accretive and provides us with a strategic base from which to expand in Ontario."

Atlas will be entitled to carry out due diligence until January 6 next year, and the plan is that after that, they will enter into the definitive agreement by January 15, 2018.

Under the binding letter of intent, Atlas and the firm have agreed to negotiate a definitive agreement, whereby it will acquire all Clinton shares for C$2.1mln cash and C$140,000 in shares on closing.

As additional consideration, Clinton shareholders will receive a furtherC$360,000, which will be paid $10,000 per month for 36 months following closing.

A significant portion of the cash required to complete the transaction will be provided by mortgage financing and a term loan, the group added.

Last month, Atlas said its first quarter in 2018 saw record sales of  C$2.74mln, which was up 40% compared to the same period last year, where the figure was C$1.96mln, the company said, posting results for the three months to August 31.

Atlas, formed almost 20 years ago, made its debut on the Toronto venture exchange on November 9 and is one of British Columbia’s leading suppliers of trusses and engineered wood products.

The company aims to expand and grow its base of business across Canada by pursuing an aggressive acquisition and consolidation strategy.

It also told investors last month that it was set to acquire Selkirk Truss (2010) Ltd in a deal, which will broaden its reach and boost annual revenues by 20%.

Atlas can carry out due diligence until December 15 this year, whereupon the  pair will enter a definitive agreement setting out terms by the end of 2017.

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