Entrec Transportation Services Ltd.

August 03, 2011 08:00 ET

Entrec Completes Acquisition of MAX Oilfield Services

SPRUCE GROVE, ALBERTA--(Marketwire - Aug. 3, 2011) - Entrec Transportation Services Ltd. ("ENTREC") (TSX VENTURE:ENT) is pleased to announce it has completed the acquisition of the business 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.

"This acquisition represents a significant early milestone in the development of our growth strategy moving forward", comments Rod Marlin, ENTREC's Chairman and CEO. "MAX is a well-managed and fast growing business with the majority of its revenue generated from the Alberta oil sands region. We look forward to working with the current management team at MAX to continue to successfully grow our revenue in the Alberta oil sands and capitalize on the synergies that the combination of ENTREC and MAX will create."

The aggregate purchase price paid on closing was $10,075,000 and was paid through a combination of: (i) the issuance of 2,000,000 common shares of ENTREC issued at a deemed price of $1.00 per share; and (ii) $8,075,000 in cash. The aggregate purchase price included $1,575,000, which specifically related to the cost of growth capital expenditures incurred by MAX in 2011. The final purchase price for the business of MAX remains subject to certain adjustments related to the normalized earnings before interest, taxes, depreciation and amortization ("EBITDA") for the trailing twelve-month period ended August 1, 2011 as well as the amount of capital expenditures incurred by MAX in 2011.

In addition, ENTREC has entered into a put/call agreement with the shareholders of MAX to acquire the issued and outstanding shares of MAX for cash consideration $4,000,000. The put/call agreement provides the option to either party to have ENTREC acquire the outstanding shares of MAX at any time between April 1, 2012 and July 31, 2012. The agreement stipulates that the only assets existing in MAX will be equipment with a current value of approximately $4,000,000 (the "Excluded Assets") and that ENTREC will not assume any liabilities. ENTREC has entered into an equipment lease arrangement to lease the Excluded Assets until such time has the put/call agreement is completed or terminated.

During the twelve-month period ended March 31, 2011, MAX generated revenue of $12.1 million and earnings before interest, taxes, depreciation and amortization of $3.0 million. Revenue for the twelve-month period ended August 1, 2012 is currently expected to approximate $15.0 million to $16.0 million.


ENTREC specializes in the transportation and rigging 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 which reflect ENTREC's current beliefs and are based on information currently available to ENTREC. These statements require ENTREC 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 ENTREC's control.

Examples of such forward-looking statements in this press release relate to, but are not limited to, ENTREC's expectation that the MAX acquisition will meet its expectations and add shareholder value and that revenue in the next twelve-month period ended August 1, 2012 will approximate $15.0 million to $16.0 million. These forward-looking statements rely on certain assumptions, including, among others, the MAX business meeting or exceeding ENTREC's internal revenue, net earnings, and cash flow forecasts for that business in the future. Such factors that may negatively impact ENTREC'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 ENTREC'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

  • Entrec Transportation Services Ltd.
    Rod Marlin
    Chairman & CEO
    (780) 960-5647

    Entrec Transportation Services Ltd.
    John M. Stevens
    President & COO
    (780) 960-5625

    Entrec Transportation Services Ltd.
    Jason Vandenberg
    (780) 960-5630