Seacliff Construction Corp.

Seacliff Construction Corp.

December 24, 2008 08:00 ET

Seacliff Construction Announces Acquisition of Leading Electrical and Data Communications Contractor

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 24, 2008) - Seacliff Construction Corp. ("Seacliff") (TSX:SDC) today announced that it has acquired Canem West Services Inc. and Canem West Operations Inc. (Canem West), a leading independently owned electrical and data communications contractor based in Vancouver, for $8 million. The acquisition, which is expected to close in January 2009, will immediately strengthen the competitive position and broaden the service offering of Canem Systems ("Canem"), Seacliff's existing electrical and data communications contracting arm. In the near term, the acquired business will operate as a separate division of Canem, with full integration expected by late 2009. While Seacliff has been actively pursuing strategic acquisition opportunities for several months, this represents the first acquisition the company has made since completing its Initial Public Offering in April 2008.

"We are extremely pleased to announce the purchase of Canem West," said Bill Crarer, Seacliff's CEO. "We have looked at many acquisition candidates since going public this past spring. None of them came close to matching the immediate gains and long-term strategic benefits Canem West provides. Most directly, the acquisition will more than double Canem's Vancouver team, adding approximately 75 highly skilled field technicians and 11 office staff. This will enable Canem to bid on much larger contracts, including public-private partnerships, while broadening our data communication capabilities. The acquisition also strengthens our position in the Vancouver market, a key strategic objective, allowing Canem to provide complete service coverage across BC and Alberta. Finally, as Canem West specializes in recurring service and special project work, the acquisition fits nicely with our strategy to enhance our exposure to this recession resistant industry sector."

Canem West was incorporated as a fully independent business in 1997, following a strategic reorganization at Canem Systems. Since then, owners Harry and Rick Friesen have established Canem West as a leading provider of next-generation electrical and data communication solutions to a blue-chip institutional and commercial client base. Long-term customers include BC Hydro, the Workers' Compensation Board of BC (WCB), the Insurance Corporation of British Columbia (ICBC) and Bentall LP. As much of its work is mission critical and is performed under ongoing service contracts, Canem West has a track record of stable revenue and EBITDA growth throughout the economic cycle.

"We are thrilled to see our company join forces with Canem Systems," said Harry Friesen, President of Canem West. "The two companies complement each other exceptionally well, in terms of culture, geographic markets, service offerings and client base. In addition, Seacliff offers the financial strength required to continue growing the business over the long-term. As a result, I believe this is a great move for all parties and I look forward to joining Canem's management team."

Plans to promote smooth integration and realize operational synergies between the two businesses are advancing quickly. Immediate priorities include maximizing productivity and leveraging new capabilities by implementing best practices, and offering complementary electrical and data communication services to existing customers of both companies.

Moving forward, Seacliff intends to continue growing its business through the strategic acquisition of other general and electrical contracting companies.

"With no debt and nearly $90 million cash on our balance sheet, Seacliff has significant resources to deploy," said Bill Crarer. "Accordingly, we are currently evaluating a number of acquisition prospects. However, as we have stated in the past, we will only make an acquisition if it is accretive to our earnings per share within one to three years, and if it strengthens our competitive position."

About Seacliff Construction Corp.

Seacliff is one of the largest and most diversified construction companies in Western Canada. It provides general contracting construction services and electrical contracting services to a wide array of clients in both the public and private sectors, with a majority of its business derived from institutional, commercial, and light industrial construction projects. Seacliff is headquartered in Vancouver, BC and operates 15 locations in British Columbia, Alberta, Saskatchewan and Manitoba, as well as one location in Northwestern Ontario. Seacliff's business is conducted through two business units: Dominion Construction, a general contractor; and Canem Systems, an electrical contractor.

As a general contractor, Dominion offers diversified general contracting, construction management and design build services in Western Canada primarily to institutional, commercial and light industrial clients. Dominion's services include preconstruction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project.

Canem provides a broad range of services including designing, building, maintaining and servicing electrical and data communication systems for institutional, commercial, light industrial and multi-family residential customers. Canem's electrical contracting services include: designing electrical distribution systems within a building or complex; procuring and installing electrical equipment and materials; on-call service for electrical maintenance and troubleshooting; preventative and scheduled maintenance for critical component installations; budgeting and preconstruction services; and management of regional and national contracts for multi-site installations.

About Canem West

Established in 1997 and based in Vancouver, BC, Canem West designs, installs and maintains electrical, data communication, riser management and building operations systems for a broad range of prominent clients across BC. In addition, Canem West provides: consulting services for the establishment of preventative maintenance programs; system evaluation, analysis and reportage; building management services; riser room management; and 24-hour emergency services.

Forward-looking Statements

Certain statements in this press release may constitute forward-looking statements or information under applicable securities legislation. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Assumptions have been made regarding, among other things, the successful implementation of Seacliff's business plan, the availability to Seacliff of qualified personnel, the continuation and completion of the projects forming Seacliff's Total Work on Hand, and general economic, business and market conditions. Although Seacliff believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Seacliff can give no assurance that such expectations will prove to be correct. The forward-looking statements are based on Seacliff's current expectations, estimates and projections, and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, among others, Seacliff's ability to be retained for existing and new project work by existing and new clients, Seacliff's ability to retain and hire the qualified personnel required, the delay or cancellation of projects forming Seacliff's Total Work on Hand, general economic, business and market conditions, and other risks as are detailed from time to time in continuous disclosure filings of Seacliff. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. These forward-looking statements are made as of the date of this press release, and Seacliff assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable laws.

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