Empire Industries Ltd.

Empire Industries Ltd.

May 01, 2007 06:00 ET

Empire Industries Ltd. Acquires KWH Constructors Corp.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 1, 2007) - Empire Industries Ltd. (TSX VENTURE:EIL)("Empire"), one of Western Canada's fastest growing steel fabrication and construction service providers, today announced that it has signed formal agreements in respect of the purchase of all of the issued and outstanding shares of Burnaby, B.C. based, KWH Constructors Corp. (www.kwhconstructors.com ), its wholly owned US subsidiary KWH Constructors Inc. and its wholly owned division, Somerset Engineering (www.somerseteng.com ) (collectively called "KWH Group"). A letter of intent was previously announced related to this transaction on March 14, 2007. The transaction is an arm's length acquisition.

The purchase price was $5.2 million, which included working capital of $1.5 million. The purchase price was paid for with a combination of cash, promissory notes and 3,636,363 Empire common shares, at a price of $0.55 per share. The three KWH principals will together own approximately 6% of Empire after giving effect to the terms of this acquisition. Empire is also pleased to announce that the three principals of KWH Group, namely Jeff Mullins, Peter Saunderson and Bob Hawk, will join the executive management committee of Empire. In conjunction with the transaction, Empire will grant options to acquire a total of 400,000 common shares of Empire at an exercise price of $0.55 per share. These options will be granted to employees of KWH Group, including the three principals named above. In the prior year, the KWH Group generated revenue of $15 million and normalized EBITDA of $1.5 million.

KWH Group has been in operation since 1989. KWH Group is a full service, turn-key construction company specializing in all erection-oriented projects. KWH Group has a specialized technical competency as an engineered erector and installer of bridges, machinery, heavy equipment and complex structures. When it comes to the challenging field of construction erection, KWH offers its clients superior standards of performance and workmanship, based on its unique complement of highly experienced staff. From the three founding partners, to the team of structural engineers, to the steel detailers, to its construction superintendents and field supervisors, KWH people undertake complex construction erection projects from start to finish.

"The addition of the KWH Group's expertise in both the erection of steel and steel construction engineering design, perfectly compliments Empire's already formidable steel fabrication and erection capabilities. This acquisition further demonstrates Empire's commitment to making strategic acquisitions and pursuing high value-added organic growth. It also enhances Empire's position as a one stop shop for steel fabrication and construction services in Western Canada," stated Guy Nelson, CEO of Empire Industries Ltd.

About Empire Industries Ltd.

Empire Industries Ltd. is a public company that was formed in July 2006. Empire Industries Ltd. is one of Western Canada's fastest growing steel fabrication and construction service providers. It conducts its business primarily through five wholly owned subsidiaries: Empire Iron Works Ltd., George Third and Son Ltd., Empire Dynamic Structures Ltd., Ward Industrial Equipment Ltd., Hopkins Steel Works Ltd, and a 49% ownership interest in Sorge's Welding Ltd. Empire's mission is to increase shareholder value by adding value to steel. The company realizes its mission by growing profits organically, targeting acquisitions and expanding its market share in the burgeoning industrial, commercial and institutional construction marketplace of Western Canada. The Corporation trades on the TSX Venture Exchange under the trading symbol EIL.

For more information, please visit our web-site at: www.empireindustriesltd.com.

This press release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire's business and affairs. These statements are identifiable by their use of verbs such as "expect", as well as by the use of future or conditional tenses. These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Empire assumes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated future events, except as may be required under applicable securities laws.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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