Bri-Chem Corp.

TSX : BRY


Bri-Chem Corp.

December 20, 2013 10:13 ET

Bri-Chem Announces Closing of $10 Million Bought Deal Financing

EDMONTON, ALBERTA--(Marketwired - Dec. 20, 2013) -

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

Bri-Chem Corp. ("Bri-Chem" or "Company") (TSX:BRY), a leading North American wholesale distributor and manufacturer of oil and gas drilling fluids and steel pipe is pleased to announce it has closed its previously announced bought deal equity financing (the "Offering") for 6,667,000 common shares of the Company at a price of $1.50 per common share (the "Offering Price") for gross proceeds of $10,000,500. The Offering was completed pursuant to the terms of an underwriting agreement dated December 4, 2013, between Bri-Chem and Cormark Securities Inc., as lead underwriter, together with Beacon Securities Limited and Paradigm Capital Inc. (collectively the "Underwriters"). Pursuant to the underwriting agreement, the Underwriters have been granted an option (the "Over-Allotment Option"), exercisable for a period of 30 days from the date hereof, to purchase up to an additional 1,000,050 Common Shares at the Offering Price for additional gross proceeds of up to $1,500,075, upon the terms and conditions set forth in the underwriting agreement, to cover over-allotments, if any, made in connection with the Offering and for market stabilization purposes.

Bri-Chem initially intends to apply the net proceeds of the Offering (including on any exercise of the Over-Allotment Option) to reduce outstanding indebtedness under the Company's borrowing facility, thereby freeing up borrowing capacity that may be redrawn to fund the Company's ongoing growth opportunities and, more specifically, to continue to fund further U.S. expansion in its North American drilling fluids divisions, through both organic growth and potential acquisitions.

This press release does not constitute an offer of the common shares for sale in the United States. The common shares have not been registered under the United States Securities Act of 1933, (the "1933 Act") as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Bri-Chem

Since our formation in 1985, Bri-Chem has established two primary segments of business through a combination of internal growth and acquisitions: Bri-Chem's Drilling Fluid Division is North America's largest independent wholesale supplier of drilling fluids for the oil and gas industry. We provide over 100 critical drilling fluid products, cementing, acidizing and stimulation additives from 31 strategically located warehouses throughout Canada and the United States; Bri-Chem's Steel Pipe Division is the first company to introduce and construct a Thermal Pipe Expansion (TPE) facility in North America for manufacturing, testing and supply of large diameter seamless steel pipe for the energy industry. Additional information about Bri-Chem is available at www.sedar.com or at Bri-Chem's website at www.brichem.com.

Forward Looking Statements

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements which may contain words such as "could", "should", "expect", "anticipate", "believe", "will", and similar expressions and statements relating to matters that are not historical facts are forward looking statements. In this press release, these statements relate to the use of proceeds of the Offering. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, demand for oilfield services for drilling and completion of oil and natural gas wells; volatility in market prices for steel, oil, natural gas, and natural gas liquids and the effect of this volatility on the demand for oilfield services generally, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although the Company believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form, our short form prospectus dated December 12, 2013 and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

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