Finning International Inc.

Finning International Inc.
Collicutt Energy Services Ltd.

Collicutt Energy Services Ltd.

November 27, 2007 08:00 ET

Finning to Acquire Collicutt Energy, Major Expansion to Service Capabilities in Alberta

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 27, 2007) -

- Collicutt shareholders to receive $9.75 per share

- Adds over 200,000 sq. ft of near purpose built operational capacity in Red Deer, as well as additional branch locations in Alberta and British Columbia

- Expands the Finning team by over 450 new employees

- Adds capacity for consolidated new equipment preparation work

- Creates a "Centre of Excellence" for mining and heavy equipment overhaul work

- Frees up capacity in existing Finning branches for additional customer service work

- Modestly accretive to earnings

Finning International Inc. ("Finning") (TSX:FTT) and Collicutt Energy Services Ltd. ("Collicutt") (TSX:COH) announced today that they have entered into a definitive transaction and support agreement dated November 27, 2007 ("the Support Agreement") pursuant to which Finning has agreed to make an offer (the "Offer") to acquire all of the issued and outstanding common shares of Collicutt. Collicutt's Board of Directors has agreed to unanimously recommend that Collicutt shareholders accept Finning's offer. The total value of this transaction is approximately C$145 million. Collicutt is a leading Canadian oilfield service company active primarily in the servicing and fabrication of natural gas compression equipment and electric power generation (EPG) packaging, mainly in Alberta and also B.C.

The acquisition will provide Finning with access to a highly skilled and experienced workforce in strategic areas within the Finning dealership territory. In addition, Finning will obtain a total of 315,000 square feet of operational capacity, of which over 200,000 square feet is in modern, near purpose-built shop facilities in Red Deer, Alberta. This will set the stage for an ambitious new phase of development as Finning moves and grows its mining and heavy equipment preparation and overhaul business into Red Deer in a new "Centre of Excellence". This move will free up capacity in existing Finning branches to handle additional customer service work. The Collicutt customer field service operations and people will be integrated into the Finning branch network to significantly expand the regional footprint.

Doug Whitehead, President and CEO of Finning International Inc. said: "This acquisition is an excellent fit for Finning as it offers a significant expansion of our customer service capabilities in western Canada. It provides us with much needed additional resources to continue meeting our customers' needs for service in the mining, heavy construction and power systems sectors, and is an example of how we are redeploying the capital received from the disposition of the UK assets to our high growth markets. It fits well with our strategy to grow the customer support services business."

Ian Reid, President of Finning (Canada) said: "The Collicutt acquisition helps us address our needs for facilities and people, and will boost our capabilities to meet the growing demand for service from our customers, particularly in the mining, heavy construction and power systems industries. We welcome the Collicutt employees to our service teams. There will be increased opportunities for our current employees as we build our Centre of Excellence and expand our customer service capability across the province."

Steven Collicutt, President and Chief Executive Officer of Collicutt commented: "This transaction recognizes the tremendous underlying value that has been built by our company over the past 20 years, and provides all Collicutt shareholders with an attractive premium to recent trading values. Finning is a world-class company. We are delighted that Finning will grow the scale and scope of the Red Deer operations in the years to come. Field service operations are also expected to see significant growth to support Finning's extensive service activities in Western Canada."

Under the Support Agreement, Finning has agreed to offer Collicutt shareholders $9.75 per share. For each Collicutt share held, Collicutt shareholders may elect to receive either: (i) $9.75 in cash, or (ii) 0.325 of a Finning common share, subject to proration as described below and a nominal cash amount, or (iii) a combination of cash and Finning common shares. Up to approximately 1,700,000 Finning common shares may be issued (the "Share Amount") if elected by Collicutt shareholders. If more than the Share Amount is elected, then the shares issued by Finning will be prorated.

Collicutt's Board of Directors has agreed to unanimously recommend that Collicutt shareholders accept Finning's offer. The Board of Directors has received an opinion from its financial advisor that the consideration to be received by Collicutt shareholders under the Offer is fair, from a financial point of view. Certain insiders, including Collicutt's Chairman and CEO, Steven Collicutt have entered into a lock-up agreement with Finning which provides that, subject to certain terms and conditions, they will tender their shares into the Offer. Collectively this group owns a total of 8.1 million shares that represents approximately 82% of the presently issued and outstanding shares.

Completion of the Offer is subject to certain customary conditions, including, among other things, acceptance by the holders of 90% of the outstanding Collicutt shares and normal course regulatory approvals. Further, the Support Agreement includes a non-solicitation covenant to the benefit of Finning, a right in favour of Finning to match any competing offers and a termination fee of approximately $2.9 million payable to Finning, for among other things, the recommendation by Collicutt's Board to accept a superior bid. The Offer, unless extended, will expire on January 15, 2008. Finning's takeover bid circular (the "Circular"), which contains all the terms of the Offer, is expected to be mailed during the first week of December 2007 to Collicutt shareholders of record. A copy of the Circular will be available on SEDAR,

A condition of the transaction is that Steven Collicutt acquire, at fair market price, the Collicutt power generation and compression sales and services activities in California currently conducted through Collicutt Energy Services Inc. and the Collicutt used oilfield equipment business in Rimbey, Alberta.

National Bank Financial, Inc. is acting as financial advisor and Borden Ladner Gervais, LLP is acting as legal advisor to Finning. Peters & Co. Limited is acting as financial advisor and Davis LLP is acting as legal advisor to Collicutt.

Conference Call and Webcast

Finning and Collicutt will hold a joint investor conference call on Tuesday November 27, 2007 at 11:30 am Eastern Time. The dial in numbers for the call are:

1-866-898-9626 (anywhere within Canada or the United States)

416-340-2216 (for participants dialing from Toronto and overseas)

The call will be webcast live at and subsequently archived on the Finning website. A playback recording will be available at 1-800-408-3053 from 2:00 pm Eastern Time on November 27, 2007 until the Offer expires. The passcode to access the conference call recording is 3244079 followed by the number sign.

An electronic copy of a presentation summarizing the highlights of the transaction will be available on both Finning's and Collicutt's website in advance of the conference call.


Senior executives from Finning and Collicutt will be available to the media to discuss this announcement at 3:30 p.m. Eastern Time on Tuesday, November 27, 2007. Members of the media wishing to participate by conference call please dial: toll-free 1-866-234-0247, or 416-443-4589 and use conference ID number: 826121.

Finning International Inc.

Finning International Inc. is the world's largest Caterpillar equipment dealer. The Company sells, rents and provides customer support services for Caterpillar equipment and engines in Western Canada, the U.K., and South America (Argentina, Bolivia, Chile and Uruguay). Headquartered in Vancouver, British Columbia, Canada, Finning International Inc. is a widely held, publicly traded corporation, listed on the Toronto Stock Exchange (symbol FTT). For additional information please visit

Collicutt Energy Services Ltd.

Collicutt Energy Services Ltd. is one of Canada's leading businesses engaged in providing a turn key solution in the service and fabrication of natural gas compression, underbalanced drilling equipment, power generation systems, and oilfield equipment. Its operations span Western Canada and the Western United States with a modern manufacturing facility located in Red Deer, Alberta and 15 strategically located branch locations. All services are performed in-house allowing for a cost effective manufacturing process. For additional information please visit:

This release contains forward-looking statements and information, which reflect the current view of Finning International Inc. and Collicutt Energy Services Ltd. with respect to future events and financial performance. Any such forward-looking statements are subject to risks and uncertainties and Finning's and Collicutt's actual results of operations could differ materially from historical results or current expectations. Finning and Collicutt assume no obligation to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein do not materialize.

Refer to Finning's and Collicutt's annual report, management information circular, annual information form and other filings with the Ontario Securities Commission and Toronto Stock Exchange for further information on risks and uncertainties that could cause actual results to differ materially from forward-looking statements contained in this report.

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