Bri-Chem Corp.

TSX : BRY


Bri-Chem Corp.

November 29, 2013 08:05 ET

Bri-Chem Corp. Announces $10 Million Bought Deal Financing and the Initiation of a Strategic Review of the Steel Pipe Division

EDMONTON, ALBERTA--(Marketwired - Nov. 29, 2013) -

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

Bri-Chem Corp. (TSX:BRY) ("the Company" or "Bri-Chem") is pleased to announce that it has entered into an agreement with a syndicate of investment dealers led by Cormark Securities Inc. and including Beacon Securities Limited and Paradigm Capital Inc. (the "Underwriters") pursuant to which the Underwriters have agreed to purchase, on a "bought deal basis" 6,667,000 common shares ("Shares") from the treasury of the Company, at a price of $1.50 per Share for aggregate gross proceeds of approximately $10 million (the "Offering").

In addition, the Company has granted the Underwriters an option ("Over-Allotment Option"), exercisable in whole or in part, to purchase up to an additional 1,000,050 Shares from the treasury of the Company at the offering price exercisable at any time on or up to 30 days following the closing of the Offering, for market stabilization purposes and to cover over-allotments, if any. In the event that the Over-Allotment Option is exercised in its entirety, the aggregate gross proceeds of the Offering shall be approximately $11.5 million.

The net proceeds of the Offering are intended to be used for further US expansion and growth opportunities in the drilling fluids division as well as general working capital.

Closing of the Offering is expected to occur on or about December 20, 2013 and is subject to certain conditions including but not limited to the receipt of all regulatory approvals including that of the Toronto Stock Exchange.

The Shares to be issued under the Offering will be offered by way of a short form prospectus in each of the provinces of Canada, except Québec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and certain other jurisdictions.

The Company is also initiating a strategic review of its steel pipe division given the potential growth opportunities in the drilling fluids division, particularly in the United States.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

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 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 closing of the Offering, the use of proceeds of the Offering and the strategic review of the steel pipe division. 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 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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