EIS Capital Corp.

EIS Capital Corp.

May 04, 2011 17:34 ET

EIS Capital Corp. Enters Into Letter of Intent to Acquire Max Oilfield Services Inc.

EDMONTON, ALBERTA--(Marketwire - May 4, 2011) - EIS Capital Corp. (TSX VENTURE:EIE.P) ("EIS Capital") is pleased to announce it has entered into a letter of intent, subject to certain conditions, to acquire the business and assets of Max Oilfield Services Inc. ("MAX"). Based in Bonnyville, Alberta, MAX operates a well maintained modern fleet of specialized truck and trailer units. MAX provides a wide range of services to its customers including heavy hauling, picker & winch truck services, hotshot services & storage facilities.

The purchase price for the business and assets of MAX will be based on a total value of approximately $15,000,000, but subject to several adjustments related to working capital, normalized earnings before interest, taxes, depreciation and amortization ("EBITDA") for the trailing twelve-month period ended August 1, 2011, excluded assets, and 2011 capital expenditures.

The purchase price shall 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 August 1, 2011.

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") which is currently anticipated to close on or about May 12, 2011 (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). 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.

"We are very impressed with the business that MAX has built and with MAX's management team." comments Rod Marlin, EIS Capital's President and CEO. "MAX is a well-managed and fast growing company located in the Cold Lake heavy oil region and adjacent to the Alberta oil sands. We look forward to working with the current management team at MAX to continue to successfully grow the business and capitalize on the synergies that the combination of Entrec and MAX will create."

EIS Capital intends to pay the cash portion of the purchase price for the proposed acquisition of MAX from the proceeds of the private placement that it is currently conducting in association with its proposed acquisition of Entrec as well as from proceeds of the credit facility that it is initially putting in place for the Entrec Acquisition. The proposed acquisition of MAX 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 MAX will be disclosed in subsequent press releases to be issued by EIS Capital in due course including certain financial information respecting MAX 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 MAX, EIS Capital's intention to fund the cash portion of the purchase price for MAX out of the proceeds of the private placement it is conducting, and the credit facility it anticipates obtaining, in each case concurrently with the proposed acquisition of Entrec and EIS Capital's expectation that the MAX 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 MAX. In addition, the ability of the MAX acquisition to meet expectations and add shareholder value is dependent on the MAX 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 specialized 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
    (780) 720-4064