Pro-Trans Ventures Inc.
TSX VENTURE : PVI

May 06, 2011 14:38 ET

Pro-Trans Ventures Inc. Announces Signing of Share Exchange Agreement With Respect to Its Proposed Acquisition of Maple Leaf Loading Ltd.

CALGARY, ALBERTA--(Marketwire - May 6, 2011) -

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Pro-Trans Ventures Inc. (TSX VENTURE:PVI) ("Pro-Trans" or the "Corporation") is pleased to announce that further to its previously announced letter of intent, as amended, with Maple Leaf Loading Ltd. ("Maple Leaf"), the Corporation has entered into a definitive share exchange agreement (the "Agreement") dated April 30, 2011 with Maple Leaf and its principal shareholders (the "Principals"), pursuant to which, along with offers to purchase and letters of transmittal, the Corporation will acquire all of the issued and outstanding securities of Maple Leaf (collectively, the "Acquisition") for a total deemed value of $12,295,000, subject to any applicable adjustment, payable on the basis of $4,375,000 in cash and 13,200,000 common shares in the capital of Pro-Trans ("Pro-Trans Shares") at a deemed price of $0.60 per Pro-Trans Share. Shareholders of Maple Leaf will also receive an aggregate of 3,000,000 series A Pro-Trans Share purchase warrants ("Pro-Trans Series A Warrants") and 3,000,000 series B Pro-Trans Share purchase warrants ("Pro-Trans Series B Warrants"). Upon completion of the Acquisition, Maple Leaf will be a wholly owned subsidiary of Pro-Trans.

Under the terms of the Agreement, the Corporation shall acquire: i) all of the outstanding common shares in the capital of Maple Leaf ("Maple Leaf Common Shares") held by its principal shareholders, each such Maple Leaf Common Share to be exchanged for 4.7855 Pro-Trans Shares, 2.98557 Pro-Trans Series A Warrants and 2.98557 Pro-Trans Series B Warrants; and ii) the outstanding Class "A" preferred shares in the capital of Maple Leaf ("Maple Leaf Preferred Shares") held by its principal shareholders, each such Maple Leaf Preferred Share to be exchanged for $4.83539 in cash and 9.27435 Pro-Trans Shares. The vesting of Pro-Trans Series A Warrants shall be determined based upon certain financing criteria of Pro-Trans, and the vesting of the Pro-Trans Series A Warrants shall be determined based upon certain performance criteria of Maple Leaf, all in accordance with the terms and conditions contained in the definitive certificates to represent such warrants, substantially in the forms of warrant certificates attached to the Agreement as filed on SEDAR at www.SEDAR.com.

The Principals consist of Darby Kreitz and Don Watt, individuals each residing in the City of Prince George, British Columbia, Allnorth Consultants Limited, a private corporation incorporated under the laws of British Columbia, of which Darby Kreitz is a significant shareholder, and Kreitz Family Holdings Ltd., a private corporation incorporated under the laws of British Columbia controlled by Darby Kreitz.

Maple Leaf is a private corporation incorporated pursuant to the laws of British Columbia. Maple Leaf provides a range of specialized transportation services related to the management, handling and transportation of ore and other products for customers involved in the mining industry in British Columbia, Alberta and the Yukon Territory.

Commenting on the signing of the Agreement, Russel Marcoux, President and Chief Executive Officer of Pro-Trans said, "We are thrilled with this opportunity. As a specialized transportation company that is established within a market possessing significant barriers to entry, Maple Leaf has attractive future earnings potential. Maple Leaf is a natural fit for both our existing business model and strategic intent. We feel confident that this move is a solid stepping stone to provide even greater opportunities for our shareholders."

Darby Kreitz, President of Maple Leaf, reinforced Marcoux's enthusiasm by remarking, "This transaction provides Maple Leaf with the ability to leverage Pro-Trans' management expertise and enable further access to capital markets. We are excited about this opportunity to take Maple Leaf to the next level and realize our corporate vision through the synergies represented by this transaction."

The Acquisition is an arms length transaction and is subject to various conditions, including among other things, completing the purchase of remaining Maple Leaf Common Shares and Maple Leaf Preferred Shares from the minority shareholders of Maple Leaf pursuant to offers to purchase on the same terms along with respective letters of transmittal, the receipt of director, shareholder and all regulatory approvals, including approval from the TSX Venture Exchange (the "Exchange") and other conditions normal for a transaction of this nature.

The parties to the Agreement may terminate the Agreement at any time prior to the closing of the Acquisition and transactions contemplated thereby (the "Closing") upon written agreement of all the parties. In addition, the Agreement may be terminated by Pro-Trans or Maple Leaf and the vendors to the Agreement upon providing notice to the other party or parties, if all required regulatory and shareholder approvals are not received by the date that is 45 days from the date of the Agreement. Furthermore, the Agreement may be terminated automatically if the Acquisition and the transactions contemplated thereby are not closed by 45 days from the date of the Agreement or such later date as the parties to the Agreement may agree upon in writing.

Other Information and Updates

Pro-Trans also announces that it has negotiated a term sheet with an arm's length private lender relating to the financing (the "Financing") for the cash portion of the consideration required by Pro-Trans to complete the Acquisition. The Financing is expected to consist of a three year term credit facility in the amount of $5,000,000, with interest payable monthly commencing one month after closing at a rate of 12% per annum, and secured by a general security agreement over certain assets.

In relation to the Acquisition, the Corporation has applied for a waiver from the Exchange with respect to the Exchange's sponsorship requirement pursuant to Section 3.4 of Policy 2.2 "Sponsorship and Sponsorship Requirements" of the Exchange's Corporate Finance Manual, however there is no assurance that the Corporation will obtain such waiver. If such a waiver is not available, a sponsor for the Acquisition shall have conducted due diligence and filed with the Exchange a sponsorship report satisfactory to the Exchange prior to the completion of the Acquisition.

The parties continue to progress in drafting a filing statement for submission to the Exchange in respect of the Acquisition. Further information regarding the details of the Acquisition including financial information and information regarding certain principals of Maple Leaf will be provided by Pro-Trans in due course. A further press release will be disseminated upon completion of the filing statement. The trading of common shares of Pro-Trans is expected to remain halted pending the requirements for reinstatement of trading of the Exchange, in relation to the Acquisition, being met.

Through this Acquisition, Pro-Trans continues to implement its business plan to pursue business opportunities within specialized segments of the transportation industry.

Cautionary Statements

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Companies' current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the Acquisition of Maple Leaf and the completion of the necessary financing to fund the Acquisition. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to Pro-Trans. The material factors and assumptions include: Pro-Trans and Maple Leaf completing the conditions precedent to the Acquisition, including the receipt of regulatory approvals, being able to obtain director and shareholder approvals as required; and the ability to raise necessary funding to complete the Acquisition. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: the failure to obtain director and shareholder approvals as required; the failure to obtain requisite regulatory approvals; the failure to obtain necessary funding; general economic and business conditions; and changes in the regulatory regulation. Pro-Trans cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and Pro-Trans is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Completion of the transaction discussed above is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and required shareholder approval. There can be no assurance that the transaction will be completed as proposed or at all and investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the proposed Acquisition, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Pro-Trans Ventures Inc. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Pro-Trans Ventures Inc.
    Russel Marcoux
    Chief Executive Officer
    (306) 664-1413