Atlas Engineered Products (CVE:AEP), a supplier of trusses, engineered wood products and building components, announced Tuesday another key transaction alongside a financing for up to C$5mln.
The company is set to buy Tandelle Specialty Inc and Pacer Building Components Inc (Tandelle-Pacer) of Ilderton, Ontario, which had revenue for its year to end October of around C$14.4mln.
On closing, Tandelle-Pacer’s chief executive and president Dave Howard will be invited to join the board at Atlas.
Key transaction
"The Tandelle-Pacer acquisition is expected to be a key transaction for Atlas that gives us a huge strategic advantage in a market in which we are already invested," said Guy Champagne, president at Atlas.
"We will be acquiring an established truss, engineered beam and wall and floor panel business with room to expand operations with ease, a very experienced management team to look after our other sites in Ontario, a large solid and growing customer base in the Greater Toronto area, and entry into the Detroit, Buffalo and Rochester markets," he added.
Atlas also announced a non-brokered private placing of up to 12.5mln shares at C$0.40 a share to raise up to C$5mln.
Net proceeds will be used for acquisitions
The net proceeds will be used for acquisition purposes, general working capital and partially for the acquisition of Tandelle-Pacer, it said.
For this, Atlas will pay C$8.6mln on closing, based on Tandelle-Pacer having a targeted net working capital of around C$2.28mln.
Subject to adjustments, based on Tandelle-Pacer’s actual net working capital at closing, the purchase price is expected to consist of C$500,000 in Atlas shares, and C$8.1 million in cash.
The closing of the acquisition is expected to occur on or before October 31 this year.