Aveda Transportation and Energy Services

TSX VENTURE : AVE


Aveda Transportation and Energy Services

December 23, 2013 10:35 ET

Aveda Transportation and Energy Services Inc. Announces Closing of Bought Deal Private Placement for Aggregate Gross Proceeds of $23 Million

CALGARY, ALBERTA--(Marketwired - Dec. 23, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Aveda Transportation and Energy Services Inc. ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced the closing of its previously announced bought deal private placement offering (the "Offering") of Subscription Receipts of the Company (the "Subscription Receipts") through a syndicate of underwriters co-led by Cormark Securities Inc. and Beacon Securities Limited and including Clarus Securities Inc., Mackie Research Capital Corporation, Dundee Securities Ltd. and GMP Securities L.P. Pursuant to the Offering, theCompanyissued 6,400,000 Subscription Receipts at a price of $3.60 per Subscription Receipt for gross proceeds to the Company of $23,040,000. Each Subscription Receipt will automatically convert into one common share (a "Common Share") of the Company without payment of additional consideration upon the completion of an acquisition by the Company(the "Acquisition") of a rig moving, hotshot and rentals business which is located in an active oilfield basin in the United States.

"Closing of this offering represents a clear endorsement of our growth strategy and provides us with the resources to act on an acquisition opportunity that will allow us to substantially scale our U.S. business," said Bharat Mahajan, Vice President, Finance and CFO of Aveda. "Our immediate focus remains onsigning a definitive agreement for the Acquisition, which we expect to occur in the near term."

The net proceeds from the Offering will be deposited in escrow pending satisfaction of certain conditions, including the condition that all conditions precedent to the completion of the Acquisition have been satisfied. If the escrow release conditions are not satisfied on or prior to March 7, 2014 or certain other termination events occur, the proceeds will be returned to the subscribers. Upon completion of the Offering, the Company intends to use the net proceeds of the Offering to fund a portion of the purchase price of the Acquisition and for general corporate purposes.

In consideration for the services of the underwritersin connection with the Offering, theCompany paid the underwritersa fee equal to 6.0% of the gross proceeds from the sale of the Subscription Receipts, other than the sale of 333,000 Subscription Receipts sold to subscribers identified by the Company. Half of the underwriters' fee was paid to the underwriters at the closing of the Offering.

Pursuant to applicable securities laws, all securities issued pursuant to the Offering will be subject to a statutory hold period which expires on April 24, 2014.

The Offering is subject to the final approval of the TSX Venture Exchange.

The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold inthe United States unless registered under the Act or unless an exemption from registration is available.

About Aveda Transportation and Energy Services

Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas and Pennsylvania. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Leduc, AB, Sylvan Lake, AB, Edson, AB, Mineral Wells, TX, Pleasanton, TX, Midland, TX, Williamsport, PA and Buckhannon, WV. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: the release of the net proceeds of the Offering from escrow; the use of the net proceedsofthe Offering; statements with respect to the Acquisition and the signing of a definitiveasset purchaseagreementin respect ofthe Acquisition; and the Company's growth opportunities. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

  • the entering into of a definitive asset purchase agreement in respect of the Acquisition;

  • the completion of the Acquisitionand the timing thereof;

  • the Company's ability to satisfy the escrow release conditions and the conversion of the Subscription Receipts into Common Shares;

  • thefinalapproval of the TSX Venture Exchangefor the Offering and the Acquisition;and

  • the performance of Aveda's businesses, including the Acquisition, current business and economic trends.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that the Acquisition will not be completed in a timely manner or at all; the risk that the necessary approvals and other consents for the completion of the Acquisition will not be satisfied in a timely manner or at all; and the otherrisks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2012. Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

Neither 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.

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