Rocky Mountain Dealerships Inc.
TSX : RME

Rocky Mountain Dealerships Inc.

August 24, 2009 16:16 ET

Rocky Mountain Dealerships Inc. Announces $21.7 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - Aug. 24, 2009) -

NOT FOR RELEASE OVER US NEWSWIRE SERVICES OR DISSEMINATION IN THE US.

Rocky Mountain Dealerships Inc. (the "Company" or "Rocky Mountain") (TSX:RME) today announced that it has entered into an agreement with a syndicate of underwriters, led by RBC Capital Markets, under which they have agreed to purchase (on a bought deal basis) from Rocky Mountain and sell to the public 3,500,000 common shares (the "Common Shares") at a price of $6.20 per share (the "Offering"). As part of the Offering, Rocky Mountain CEO, Matt Campbell intends to purchase 80,000 Common Shares with a purchase price of $496,000, and President, Derek Stimson intends to purchase 80,000 Common Shares with a purchase price of $496,000. Subject to the Offering and the intended purchases, Mr. Campbell will own (directly and indirectly) 16.44% of the equity and Mr. Stimson will own (directly and indirectly) 11.67% of the equity. The Offering is expected to close on or about September 15, 2009.

The purchase price of $6.20 per Common Share will result in gross proceeds of $21.7 million (including the proceeds from the sale of Common Shares to Messrs. Campbell and Stimson). The net proceeds of the Offering will be used by Rocky Mountain for the repayment of a portion of its debt, general corporate purposes and to fund future acquisitions.

Rocky Mountain has also granted the underwriters an option to purchase up to an additional 525,000 Common Shares at a price of $6.20 per Common Share at any time up to 30 days following the closing of the initial Offering.

The Common Shares will be issued by way of a short form prospectus to be filed in each of the provinces and territories of Canada, and by way of private placement in the United States to Qualified Institutional Buyers pursuant to Rule 144A. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange.

Matt Campbell, CEO, provided the following comments on the financing: "This equity financing will strengthen our balance sheet significantly and provide us with the flexibility to opportunistically execute on the numerous acquisition opportunities we see today in the market."

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

Rocky Mountain represents one of Canada's largest agriculture and construction equipment dealerships with a total of 22 dealership branches throughout Alberta, Saskatchewan and Manitoba. Rocky Mountain sells, rents and leases new and used construction and agriculture equipment, including the Case Construction and Case IH Agriculture brands, as well as offering product support and finance and insurance products to its customers.

Certain information set forth in this press release contains forward-looking statements. Specifically, this press release contains forward-looking statements concerning the anticipated use of proceeds of the Offering and the anticipated closing date of the Offering. The anticipated closing date assumes that prior to that date the Company will obtain all necessary regulatory approvals and all applicable pre-conditions will be satisfied. The anticipated use of proceeds assumes that the Offering occurs as contemplated. In each case, the risk factors that could cause actual results to vary from results expressed or implied by the forward-looking statements contained in this press release are primarily events beyond the Company's control that preclude the Company from satisfying all applicable pre-conditions and include the risks that the Offering may not close. These forward-looking statements may prove to be incorrect and undue reliance should not be placed on them.

Contact Information

  • Rocky Mountain Dealerships Inc.
    M.C. (Matt) Campbell
    Chairman and Chief Executive Officer
    (403) 243-8600
    (403) 243-2264 (FAX)
    or
    Rocky Mountain Dealerships Inc.
    Brian Taschuk
    Chief Operating Officer
    (403) 243-8600
    (403) 243-2264 (FAX)
    or
    Rocky Mountain Dealerships Inc.
    Garrett Ganden
    Chief Financial Officer
    (403) 243-8600
    (403) 243-2264 (FAX)
    or
    Investor Relations
    Renmark Financial Communications Inc.
    John Boidman, Vice President
    (514) 939-3989
    jboidman@renmarkfinancial.com