Enterprise Group, Inc.

Enterprise Group, Inc.

June 17, 2013 07:00 ET

Enterprise Group, Inc. Announces Closing of a Specialized Underground Infrastructure Construction Company

ST. ALBERT, ALBERTA--(Marketwired - June 17, 2013) - Enterprise Group, Inc. ("Enterprise" or the "Company") (TSX:E) is pleased to announce that it has completed its previously announced acquisition of a specialized underground infrastructure construction company, Calgary Tunnelling & Horizontal Augering Ltd., for a purchase price of $12 million plus working capital, subject to post-closing adjustment. The acquisition is effective May 1, 2013. The acquisition was funded through a combination of cash, the issuance of 727,908 common shares of the Company at a deemed price of $0.68 per share and vendor take-back financing in the amount of $1 million to be paid over two years.

Founded in 1984, Calgary Tunnelling & Horizontal Augering LTD., ("CTHA") is a North American leader in the highly specialized tunnelling field. CTHA utilizes a number of tunnelling disciplines to get the job done efficiently and safely. Some of these disciplines are laser guided boring & augering, pipe ramming, pipe jacking/tunnel boring (TBM), among others. Tunnelling is a highly specialized segment of the construction industry and as a result, has a very lightly populated landscape for competition. The previous owner/manager has agreed to a long term employment agreement and by retaining him and his expert team it will assist Enterprise to effectively integrate and invest into strategic growth initiatives. Leonard Jaroszuk, President & CEO of Enterprise comments; "CTHA has the potential for substantial growth over the next few years we are extremely excited to work with this tremendously skilled group."

Enterprise is projecting from the effective date of May 1, 2013; CTHA will bring in approximately $12 million in revenue while delivering nearly 40% in EBITDA for the remainder of 2013.

CTHA performs its services from the west coast through to central Canada across the energy, utility and infrastructure segments. Its clients range from Canada's largest rail companies and premier utility providers to leading infrastructure contractors and some of North America's largest pipeline companies. CTHA's revenue stream is well diversified between all of these segments.

Current infrastructure projects include a series of technically difficult tunnels being constructed at the massive $600 million Calgary International Airport expansion, while other crews are completing several large diameter utility crossings under the Trans Canada highway near Banff National Park. In Saskatchewan, crews are currently working to bring in underground water lines to one of Canada's largest Potash producers.

The 3 to 5 year outlook for pipeline construction is especially intriguing. CTHA is a leader in underground tunnelling for large diameter pipelines. Among several ongoing projects CTHA is engaged in a three year, long distance pipeline project which is in its first year of construction. CTHA provides underground tunnelling at several crossings which cannot be open cut, such as road, highway and rail crossings. In 2008, the Kinder Morgan Anchor Loop was put into service. CTHA was selected to perform the tunnelling through the extremely difficult terrain of Jasper National Park in the Canadian Rockies. Pipeline projects like these all require the specialized services that CTHA provides. The current roster of proposed long distance pipelines is at a historic high and Enterprise believes that the Company is extremely well positioned to benefit from this boom in pipeline construction.

About Enterprise Group, Inc.

Enterprise Group, Inc. is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries. The Company's focus is primarily utility & infrastructure construction and specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources to support continued growth. Enterprise became a Western Canadian leader in flameless heat technology in September 2012 with its acquisition of Artic Therm International Ltd. and has now become a technological leader in underground infrastructure construction by the closing of Calgary Tunnelling & Horizontal Augering Ltd.

Forward Looking Information

Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, statements with respect to the use of proceeds. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

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