Semcan Inc.
TSX VENTURE : STT

Semcan Inc.

April 23, 2008 16:38 ET

Semcan Inc. Announces That it has Completed the Acquisition of Naston Limited

TORONTO, ONTARIO--(Marketwire - April 23, 2008) - Semcan Inc. ("Semcan") (TSX VENTURE:STT) announced today that it has completed the previously announced acquisition of all of the issued and outstanding shares of Naston Limited ("Naston").

Naston carries on the business of engineering and contracting services specializing in water and waste water treatment systems, sewage treatment package plants and solutions for sustainability and water re-use. Naston has been in business for thirty years and is headquartered in Weybridge, Surrey, England. Naston enjoys long term operating contracts with some of the major publicly traded water utility companies in the United Kingdom. In addition Naston provides its services in the Middle East, North and West Africa and most recently secured a contract in the Cape Verde Islands which was financed by the World Bank.

The purchase price of Pounds Sterling 5.2million (about $10.2 million) includes the plant and equipment, fixtures and fittings, office equipment, and working capital and the value in the quality of people employed by the company and its current backlog of work. Based on the audited financial statements for the year ended December 31, 2007 Naston has working capital of Pounds Sterling 1,120,000 (about $2,240,000), net tangible assets of Pounds Sterling 57,000 (about $114,000) and no debt.

The purchase was financed through a private placement financing (see press release of April 22, 2008) and the previously announced bridge loan (see press release of April 15, 2008).

"This acquisition is fundamental to our strategy. It elevates Semcan to an international provider of environmental services with emphasis on water management. We are now represented in Vancouver, British Columbia and Mississauga, Ontario in Canada, Pensacola, Florida in the United States, and Weybridge in the United Kingdom. The intellectual capability from our combined management teams in the areas of environmental engineering, water management and greenhouse gas emission management will give us a competitive edge in a growing world wide market for these types of services," said Phil Jamieson, Chairman and CEO of Semcan Inc.

"Based on the audited financial statements of Naston for the year ended December 31, 2007, Naston had revenue in excess of 10,000,000 pounds (approximately $20 million) and 2007 EBITDA of 962,000 pounds (approximately $ 1.92 million)" said Phil Jamieson.

About Semcan Inc.

SEMCAN is a growth company expanding through acquisitions within the Industrial and Distribution sectors. SEMCAN seeks out well managed profitable companies that meet certain financial parameters. SEMCAN works with existing management to grow the acquired companies both organically and through further complementary acquisitions. SEMCAN provides the central finance and administrative functions, allowing operational management to remain focused on bottom line profitability thereby increasing shareholder value.

Caution Regarding Forward-Looking Information and Non-GAAP Measures

Forward-Looking Information

This news release contains certain forward-looking statements. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of Semcan. In particular, statements regarding the future operating results and economic performance are forward-looking statements. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at www.sedar.com. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of Semcan considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of Semcan nor its directors assume any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Non-GAAP Measures

The term "EBITDA" is a financial measure used in this document which is not a standard measure under Canadian generally accepted accounting principles. Semcan's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, Semcan's measure of EBITDA, as presented in this press release, may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings determined in accordance with generally accepted accounting principles, before depreciation and amortization, interest expense, and income tax expense. Management believes that EBITDA is a useful supplemental measure of cash available for debt service, working capital, capital expenditures, income taxes, and distribution. Investors are cautioned that EBITDA, as a non-GAAP measure, is not an alternative to measures under GAAP and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Semcan Inc.
    Phil Jamieson
    Chairman
    (416) 703-1692 x 221