Great Prairie Energy Services Inc.
TSX VENTURE : GPE

May 06, 2014 07:00 ET

Great Prairie Announces Execution of Asset Purchase Agreement

CALGARY, ALBERTA--(Marketwired - May 6, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES

Great Prairie Energy Services Inc. (TSX VENTURE:GPE) ("Great Prairie" or the "Company") is pleased to announce that it has entered into a definitive Asset Purchase Agreement with an arms' length public company and its private operating subsidiary (collectively, the "Vendors") in connection with the acquisition by the Company of certain oilfield service business and related operations in Alberta Saskatchewan and British Columbia (the "Purchased Business") for consideration of $10 million (the "Transaction"). The Transaction is anticipated to close on or about May 15, 2014, and is subject to certain conditions and approval from the TSX Venture Exchange.

The purchase price of the Transaction will be funded by way of existing credit facilities and working capital. The purchase price represents a multiple of approximately 2.9x 2013 EBITDA of the business being acquired under the Transaction. Based on the recent acquisition of Green Dawg Inc. and assuming the completion of the Transaction, management of Great Prairie estimates that Great Prairie would have recorded, on a pro forma basis, approximately $12 million in total adjusted EBITDA for the year ended December 31, 2013 (the "Adjusted EBITDA Estimate").

The Purchased Business includes oilfied rental, hauling and frac fluid services and management anticipates that the Purchased Business will complement Great Prairie's existing operations. The operations of the Purchased Business are located in Drumheller, Sundre and Valleyview, Alberta, and Kindersley, Saskatchewan. Great Prairie will continue to operate the facilities of the Purchased Business at the above locations. The Purchased Business will operate under the Great Prairie name upon closing of the Transaction. Great Prairie is extending employment offers to key senior managers, field, and office staff involved in the Purchased Business.

Sid Dutchak, President of Great Prairie stated: "We are excited about this transformational acquisition which will provide us with greater operational flexibility and reach into new key areas and the addition of talented staff who will be essential in the continuing success of Great Prairie. This complementary acquisition further enables us to target high growth areas with organic capital programs and will support further acquisition activity by adding core focus areas."

In association with the Transaction, Great Prairie has increased the term component of its credit facility to $18 million. Great Prairie's operating line remains unchanged at $2 million.

Great Prairie is a Calgary headquartered oilfield rental and hauling company focussed on servicing the oil and gas sector in Saskatchewan and Alberta.

Forward-Looking Statements and Reader Advisory

This news release contains forward-looking statements relating to terms of the Transaction, the anticipated closing date of the Transaction and planned future operations of Great Prairie. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Transaction will not be completed if the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Transaction is not satisfied; the risk that closing of the Transaction could be delayed if Great Prairie is not able to obtain the necessary approvals on the timelines planned; the timing of obtaining required approvals and satisfying closing conditions for the Transaction, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of Great Prairie.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Great Prairie disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Great Prairie undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.

Readers should note that EBITDA is a non-GAAP financial measures and do not have any standardized meaning under GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. Great Prairie believes that EBITDA is a useful supplemental measure, which provide an indication of the results generated by the Great Prairie's primary business activities prior to consideration of how those activities are financed, amortized or taxed. Readers are cautioned, however, that EBITDA should not be construed as an alternative to comprehensive income (loss) determined in accordance with GAAP as an indicator of Great Prairie's financial performance.

The Adjusted EBITDA Estimate was estimated by the management of Great Prairie based on the audited annual consolidated financial statement of Great Prairie for the year ended December 31, 2013, reviewed unaudited annual financial statement of Green Dawg Inc. (a private automated catwalk rental company acquired by Great Prairie on March 10, 2014) and the statement of net earnings of the Purchased Business for the year ended December 31, 2013.

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.

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