EIS Capital Corp.
TSX VENTURE : EIE.P

May 03, 2011 17:25 ET

EIS Capital Corp. Enters Into Letter of Intent to Acquire KEM Enterprises Ltd.

EDMONTON, ALBERTA--(Marketwire - May 3, 2011) - EIS Capital Corp. ("EIS Capital") (TSX VENTURE:EIE.P) is pleased to announce it has entered into a letter of intent, subject to certain conditions, to acquire 100% of the issued and outstanding shares of KEM Enterprises Ltd. ("KEM"). KEM is based in Fort McMurray, Alberta and specializes in the transportation of oilfield equipment within the Alberta oil sands region. KEM's fleet consists of over 50 trucks and trailers, including low boys, high boys, winch trucks, tractors, and picker trucks.

"Operating since 1985, KEM has built a strong reputation as a leading oilfield equipment hauler in the Fort McMurray area," comments Rod Marlin, EIS Capital's President and CEO. "We are very excited to have KEM and its employees joining our team. KEM will provide us with a solid base right in the heart of the Alberta oil sands to further grow our services and become a leading provider of specialized transportation services in the Alberta oil sands region."

The purchase price will be payable through a combination of: (i) the issuance of 2,000,000 shares of EIS Capital at a deemed price of $1.00 per share; and (ii) the balance payable in cash. The acquisition is currently anticipated to close on or about September 1, 2011. The parties to the letter of intent have agreed to keep the purchase price terms confidential until such time as a binding definitive agreement is executed.

Completion of the proposed acquisition is subject to a number of conditions including, but not limited to, the completion of satisfactory due diligence by EIS Capital as well as approval of the Board of Directors of EIS Capital. Completion of the proposed acquisition is also subject to the receipt of any required regulatory approvals including, but not limited to, the approval of the TSX Venture Exchange. In addition, completion of the proposed acquisition is subject to the prior completion of EIS Capital's qualifying transaction to acquire Entrec Transportation Services Ltd. ("Entrec") (for more information on the proposed acquisition of Entrec, see the Filing Statement of EIS Capital dated April 28, 2011 which is available on SEDAR at www.sedar.com).

EIS Capital intends to pay the cash portion of the purchase price for the proposed acquisition of KEM from the proceeds of the private placement that it is currently conducting in association with its proposed acquisition of Entrec. The proposed acquisition of KEM is an arm's length transaction for EIS Capital and will not result in the creation of any new insiders or control persons for EIS Capital. Additional information related to the proposed acquisition of KEM will be disclosed in subsequent press releases to be issued by EIS Capital in due course including certain financial information respecting KEM and the total purchase price.

About EIS Capital

EIS Capital is currently in the process of completing its qualifying transaction to acquire Entrec. The qualifying transaction, assuming all conditions required to complete the transaction are met, is expected to close on or about May 12, 2011. The common shares of EIS Capital trade on the TSX Venture Exchange under the trading symbol "EIE.P".

Following completion of EIS Capital's qualifying transaction, the business of EIS Capital will be the transportation and rigging of overweight and oversized cargo for the oil and gas, construction, petrochemical, mining and power generation industries.

Forward-looking statements

This press release contains forward-looking statements which reflect EIS Capital's current beliefs and are based on information currently available to EIS Capital. These statements require EIS Capital to make assumptions it believes are reasonable and are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond EIS Capital's control. Examples of such forward-looking statements in this press release relate to, but are not limited to, EIS Capital's ability to complete its qualifying transaction, EIS Capital's ability to close the proposed purchase of KEM, EIS Capital's intention to fund the cash portion of the purchase price out of the proceeds of the private placement it is conducting concurrently with the proposed acquisition of Entrec and EIS Capital's expectation that the KEM acquisition will meet its expectations and add shareholder value. These forward-looking statements rely on certain assumptions, including, among others, EIS Capital's ability to obtain regulatory approvals for the transactions, the satisfactory completion of due diligence and EIS Capital's ability to obtain financing sufficient to fund the purchase price of both the qualifying transaction and KEM. In addition, the ability of the KEM acquisition to meet expectations and add shareholder value is dependent on the KEM business meeting or exceeding EIS Capital's internal revenue, net earnings, and cash flow forecasts for that business in the future. Such factors that may negatively impact EIS Capital's ability to achieve these forecasts include, but are not limited to, fluctuations in the demand for oilfield transportation services, political and economic conditions, industry competition, and EIS Capital's ability to attract and retain both customers and key personnel. The statements in this press release are made as of the date of this release.

Neither the 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.

Contact Information

  • EIS Capital Corp.
    Rod Marlin
    President & CEO
    (780) 940-1438

    EIS Capital Corp.
    Jason Vandenberg
    CFO
    (780) 720-4064