ENTREC Corporation

ENTREC Corporation

June 06, 2012 08:00 ET

ENTREC Completes Acquisition of Mains Group of Companies

SPRUCE GROVE, ALBERTA--(Marketwire - June 6, 2012) - ENTREC Corporation (TSX VENTURE:ENT) ("ENTREC" or the "Company") is pleased to announce it has closed its acquisition of the Mains Group of Companies ("Mains Group"). Based in Nisku, Alberta, the Mains Group has been providing crane and heavy haul transportation services to all major industry sectors throughout western Canada for 18 years. In 2009, the Mains Group also expanded its operations through Mains Crane USA to Fargo, North Dakota adjacent to the Bakken region.

The Mains Group currently employs approximately 100 employees and operates a modern, well maintained fleet of cranes and specialized heavy haul transportation equipment currently valued in excess of $30 million. The Mains Group operates a crane fleet of over 60 units consisting of rough terrain cranes, all terrain cranes, crawlers, carry decks and picker trucks. The transportation fleet includes 42 lines of hydraulic platform trailers, 10 power units, and approximately 40 conventional heavy haul trailers.

"Our expansion into the crane services market is a key element of our overall growth strategy," comments Rod Marlin, ENTREC's Chairman and CEO. "The acquisition of the Mains Group represents a significant step forward for ENTREC in becoming a leading provider of integrated crane and heavy haul solutions to our customers throughout North America."

The aggregate purchase price paid on closing was $57.8 million, less finance leases assumed as at the closing of the transaction. The purchase price paid at closing consisted of: (i) the issuance of 15,150,000 common shares of ENTREC issued at a deemed price of $1.35 per share; and (ii) the balance in cash. The final purchase price remains subject to adjustments based on the Mains Group's working capital balances as at May 31, 2012.

Upon closing of the acquisition, ENTREC also granted 15,150,000 common share purchase warrants (the "Warrants") to the vendors, each Warrant entitling the holder thereof the right to acquire one common share of ENTREC at an exercise price of $1.50 per common share at any time from June 1, 2013 to May 31, 2014 (the "Expiry Date"). The holder shall not, at any time, be entitled to exercise any portion of the Warrants that would result in the holder owning 20% or more of ENTREC's issued and outstanding common shares. If upon the Expiry Date, any portion of these Warrants is not exercisable because such exercise would result in the holder owing 20% or more of ENTREC's issued and outstanding common shares, then the Expiry Date of such portion of the Warrants shall be extended by a period of one year, provided that the Expiry Date may not be extended beyond June 1, 2017.

Preferred Supplier Agreement

In conjunction with the closing of the acquisition of the Mains Group, ENTREC has entered into long-term renewable services contracts with the Mains Group's largest clients (the "Preferred Supplier Agreements"). These Preferred Supplier Agreements have the potential to generate revenue in excess of $100 million over the initial 5 year term.

Mains Group Financial Performance

ENTREC estimates the Mains Group will generate revenue in excess of $40.0 million and normalized earnings before interest, taxes, depreciation and amortization exceeding $16.0 million for its 12 month period ending September 30, 2012. However, the anticipated growing demand for cranes and specialized heavy haul transportation to serve the Alberta oil sands could increase this amount in the future.

ENTREC Updates Revenue Guidance for 2012

Based on ENTREC's current expectations for future business activity, and including the acquisition of the Mains Group just completed, ENTREC estimates revenue for the year ending December 31, 2012 could exceed $115 million.

This represents an increase from ENTREC's previous revenue guidance of between $85 million and $95 million and results primarily from the revenue contribution related to the acquisition of the Mains Group beginning on June 1, 2012. Due to continuing strength in ENTREC's expectations for potential project work during the remainder of 2012, the Company has also removed the ceiling from its revenue guidance.

ENTREC Appoints Charles (Chuck) Sanders and Carolyn Mains to Board of Directors

ENTREC is also pleased to announce the appointment of Charles (Chuck) Sanders and Carolyn Mains to its Board of Directors, effective immediately.

Chuck Sanders has held the post of Chief Financial Officer with JV Driver Group since 2008, and previously held the position of Corporate Accountant with JV Driver Group. Prior to joining the JV Driver team, Chuck was with the firm of Hill and Partners Chartered Accountants and was part of the audit team for the JV Driver Group as well as various other clientele of the firm in the construction, banking and forestry sectors. Chuck is an experienced senior executive in the construction industry and has extensive financial and industry experience. Chuck holds the designation of Certified General Accountant, a Bachelor of Commerce Degree as well as a Business Administration Diploma. Chuck has also completed extensive Mergers and Acquisition training from the Wharton Business School at the University of Pennsylvania.

Carolyn Mains assumed the role of Chairperson for the Mains Group in 2010. With long experience in the crane and heavy haul transportation industry, Carolyn brings her expertise and passion for the people of the Mains Group to the ENTREC Board of Directors to aid in the transition of the Mains Group and contribute to ENTREC's future success.

"We are pleased to welcome Chuck and Carolyn to our Board," comments Rod Marlin, Chairman of ENTREC. "With their significant experience within our industry, Chuck and Carolyn will bring valuable insight to our Board as we continue to execute on our growth strategies."

The Board appointments remain subject to final approval from the TSX Venture Exchange.


ENTREC specializes in the lifting, transportation (over the road and on-site), loading, off-loading and setting of overweight and oversized cargo for the oil and gas, construction, petrochemical, mining and power generation industries. The common shares of ENTREC trade on the TSX Venture Exchange under the trading symbol "ENT".

Forward-looking statements

This press release contains forward-looking statements that reflect ENTREC's current beliefs and that are based on information currently available to ENTREC. These statements require ENTREC to make assumptions it believes are reasonable but, as a result of such assumption, such forward-looking statements 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 ENTREC's control.

Examples of such forward-looking statements in this press release relate to, but are not limited to, (i) ENTREC's expectation the Mains Group will generate revenue in excess of $40.0 million and normalized earnings before interest, taxes, depreciation and amortization exceeding $16.0 million in the 12 month period ending September 30, 2012 and that such amounts could increase further in the future if demand for these services in the Alberta oil sands continues to grow, (ii) belief ENTREC could earn revenue from the Preferred Supplier Agreements in excess of $100 million over five years; and (iii) projection that ENTREC's consolidated revenue for the year ending December 31, 2012 could exceed $115 million.

These forward-looking statements rely on certain expectations and assumptions, including, among others, ENTREC meeting its internal revenue, net income, and cash flow forecasts in the future. Factors that may negatively impact ENTREC's ability to achieve these forecasts include, but are not limited to, fluctuations in the demand for specialized crane and heavy haul transportation services in the Alberta oil sands region and across western Canada, political and economic conditions, industry competition, and ENTREC's ability to attract and retain both customers and key personnel.

Readers are cautioned not to place undue reliance on these forward-looking statements, which are given as of the date hereof, and to not use such forward-looking statements for anything other than their intended purpose. ENTREC undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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

  • ENTREC Corporation
    Rod Marlin
    Chairman & CEO
    (780) 960-5647

    ENTREC Corporation
    John M. Stevens
    President & COO
    (780) 960-5625

    ENTREC Corporation
    Jason Vandenberg
    (780) 960-5630