Entrec Corporation

Entrec Corporation

September 04, 2012 08:00 ET

ENTREC Enters Into Letter of Intent With Tiggo Transport Ltd.

SPRUCE GROVE, ALBERTA--(Marketwire - Sept. 4, 2012) - ENTREC Corporation ("ENTREC")(TSX VENTURE:ENT) is pleased to announce it has entered into a letter of intent, subject to certain conditions, to acquire 100% of the issued and outstanding shares of Tiggo Transport Ltd. ("TIGGO"). Based in Grande Prairie, Alberta, TIGGO has been providing heavy haul transportation and lifting services to the oil and gas industry since 1999. In 2010, TIGGO expanded its operations into Dawson Creek, British Columbia. TIGGO operates a modern and well maintained equipment fleet valued at approximately $10 million, including 6 crane mounted picker trucks, 25 tractor units, 25 support vehicles, and over 60 trailers.

"TIGGO is a very well managed and highly respected company in the transportation industry and we look forward to welcoming David and his team into the ENTREC family," comments John M. Stevens, ENTREC's President and COO. "With TIGGO, ENTREC will now have strategically placed operating locations in all of our key markets throughout western Canada. With these hubs in place, we believe we are well positioned to achieve significant organic revenue growth over the coming years."

"Our merger with ENTREC sets the stage for the continued expansion of our services throughout the Peace Country in north-east BC and north-west Alberta," comments David Friesen, TIGGO's Founder and President. "We believe ENTREC is a great fit, not only for our business as it grows in the future, but for our employees as we share many of the core values that have made both of our businesses successful."

Going forward post-transaction, David Friesen will continue to manage TIGGO's current operating locations in Grande Prairie, Alberta and Dawson Creek, British Columbia.

The aggregate consideration payable for 100% of the issued and outstanding shares of TIGGO will consist of (i) the issuance of 4,800,000 common shares of ENTREC; (ii) $10,000,000 in cash, less any debt outstanding as at closing; and (iii) a non-interest bearing vendor take-back arrangement for $3,000,000, payable in cash and due April 1, 2013. ENTREC expects to increase the amount available under its senior credit facilities to finance the cash portion of the purchase price. The acquisition of TIGGO is anticipated to close on November 1, 2012.

During the year ended March 31, 2012, TIGGO generated earnings before interest, taxes, depreciation and amortization ("EBITDA") of approximately $6 million.

Reader Advisory

Completion of the proposed transaction is subject to, among other things, the negotiation and execution of a definitive binding agreement, approval of the board of directors of ENTREC, regulatory approval (including but not limited to the approval of the TSX Venture Exchange), receipt of debt financing sufficient to complete the transaction, and the completion of due diligence activities. There can be no assurance that these conditions precedent, or any other conditions precedent, will be satisfied. Further, there can be no assurance that the proposed transaction will be completed as proposed or at all.


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 assumptions, 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 that the TIGGO acquisition will be completed and the terms on which it will be completed, (ii) belief that ENTREC will be well positioned to achieve significant organic revenue growth over the coming years, and (iii) ENTREC's expectation it will increase the amount available under its senior credit facilities. These forward-looking statements rely on certain expectations and assumptions, including, among others, (i) the results of ENTREC's due diligence review of the business proposed to be acquired being satisfactory, (ii) the ability of the parties to agree to the terms of a definitive agreement, (iii) the ability of ENTREC to receive the various approvals required, (iv) ENTREC obtaining additional debt financing and on terms that are satisfactory to the lenders and ENTREC, and (v) TIGGO meeting or exceeding ENTREC's internal revenue, net income, and cash flow forecasts for that business in the future.

Although ENTREC believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because ENTREC can give no assurance that they will prove to be correct. The results of the due diligence review on the businesses proposed to be acquired by ENTREC may be less than satisfactory, the parties may be unable to agree to the terms of the definitive documentation required for the transaction, and ENTREC may not be able to obtain additional debt financing and all required approvals. 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