Entrec Transportation Services Ltd.
TSX VENTURE : ENT

October 03, 2011 08:00 ET

Entrec Enters Into Letters of Intent to Acquire Trak Equipment Haulers and Jay Reid Trucking Ltd.

SPRUCE GROVE, ALBERTA--(Marketwire - Oct. 3, 2011) - Entrec Transportation Services Ltd. ("ENTREC") (TSX VENTURE:ENT) is pleased to announce it has entered into separate letters of intent, subject to certain conditions, to acquire the businesses and assets of Trak Equipment Haulers ("TRAK") and Jay Reid Trucking Ltd. ("JAY REID").

TRAK is based in Edmonton, Alberta and specializes in the transportation of over-sized and over-weight equipment within the oil and gas and construction industries. TRAK currently provides its services within the Provinces of Alberta, British Columbia and Saskatchewan. The assets acquired from TRAK will be integrated into ENTREC's existing Spruce Grove division.

"Serving the heavy haul transportation industry for over 25 years, this business will complement the strong presence we are developing in Western Canada," comments Rod Marlin, ENTREC's Chairman and CEO. "We are experiencing a high demand for our services and this acquisition will help provide the additional equipment and manpower resources we need to meet this demand."

The purchase price for TRAK will be payable through a combination of: (i) the issuance of 777,778 common shares of ENTREC issued at a deemed price of $1.35 per share; and (ii) $2,300,000 payable in cash. The acquisition of TRAK is currently anticipated to close on or about November 1, 2011.

JAY REID is based in Bonnyville, Alberta and specializes in the transportation of over-sized and over-weight equipment within the oil and gas and construction industries. JAY REID currently provides its services within the Provinces of Alberta and Saskatchewan. The assets acquired from JAY REID will be integrated into ENTREC's existing Bonnyville division.

"This acquisition will be a great fit with our existing service offerings and will build on our previous acquisition of Max Oilfield Services Inc., completed earlier this year," comments Rod Marlin. "This growth is significantly expanding our heavy haul transportation capabilities and is allowing us to meet the growing demand for these services."

The purchase price for JAY REID will be payable through a combination of: (i) the issuance of 422,223 common shares of ENTREC issued at a deemed price of $1.35 per share; and (ii) $900,000 payable in cash. The acquisition of JAY REID is currently anticipated to close on or about October 24, 2011.

The combined TRAK and JAY REID fleet consists of 2 pilot trucks, 12 specialized tractor units, over 40 specialized trailers and various additional support and ancillary equipment pieces. Revenue generated from the acquisitions for the twelve-month period ending December 31, 2012 is currently expected to approximate $6.0 million.

Completion of the proposed acquisitions is subject to a number of conditions including, but not limited to, the completion of satisfactory due diligence by ENTREC as well as approval of the Board of Directors of ENTREC. Completion of the proposed acquisitions is also subject to the receipt of any required regulatory approvals including, but not limited to, the approval of the TSX Venture Exchange.

About ENTREC

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 TRAK and JAY REID acquisitions will meet its expectations and add shareholder value and that revenue in the twelve-month period ended December 31, 2012 will approximate $6.0 million. These forward-looking statements rely on certain assumptions, including, among others, the TRAK and JAY REID businesses 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
    CFO
    (780) 960-5630