StorageVault Canada Inc.
TSX VENTURE : SVI

November 13, 2008 07:30 ET

StorageVault Canada Inc. Announces the Signing of an Acquisition Agreement With Canadian Pups Storage Inc. and the Signing of a Master Franchise Agreement With Canadian Pups Franchises Inc.

Termination of the Acquisition of Purchase and Sale Agreement With a Cambridge Self-Storage Facility

REGINA, SASKATCHEWAN--(Marketwire - Nov. 13, 2008) - StorageVault Canada Inc. ("StorageVault") (TSX VENTURE:SVI) is pleased to announce that it has entered into an Acquisition Agreement of Purchase and Sale (the "Acquisition Agreement") to acquire from Canadian PUPS Storage Inc. all of the assets of a portable storage business located in Regina, Saskatchewan (the "Acquisition"). StorageVault has also entered into a Master Franchise Agreement (the "Franchise Agreement") with Canadian PUPS Franchises Inc. which provides StorageVault the exclusive Canadian franchise rights for the development and operation of PUPS portable storage franchises throughout Canada (the "Franchise Rights"). The Acquisition and the granting of the Franchise Rights are non-arm's length transactions. No finder's fee is payable in relation to either transaction.

About the Acquisition

Canadian PUPS Storage Inc. is a portable storage business operating as a franchisee in Regina, Saskatchewan under a franchise agreement with Canadian PUPS Franchises Inc. The company provides portable storage services to residential and commercial customers by delivering portable storage containers to customer locations. At present, the business has 249 portable storage containers in inventory with an approximately 88% occupancy rate. Canadian PUPS Storage Inc. is owned, collectively, as to a 76% interest, by Alan Simpson, the President, Chief Executive Officer and a director of StorageVault, and Glenn Fradette, the Chief Financial Officer and a director of StorageVault (collectively, the "Non-Arm's Length Vendors"), with the remaining 24% owned by a shareholder that is unrelated to StorageVault.

The purchase price for the Acquisition is $1.33 million (subject to customary adjustments). The purchase price will be comprised of a cash payment of $600,000, the assumption of debt of approximately $190,000 and the issuance of $540,000 (subject to closing adjustments) of common shares of StorageVault, at a price of $0.23 per common share, to the Non-Arm's Length Vendors.

The Acquisition is subject to the approval of the shareholders of StorageVault other than the Non-Arm's Length Vendors and their affiliates, the approval by the TSX Venture Exchange (the "TSX Venture") in accordance with the applicable policies of the TSX Venture, due diligence and other customary conditions for transactions of a similar nature. There can be no assurance that the closing conditions for the Acquisition will be satisfied or that TSX Venture approval will be granted. If all conditions are satisfied and the approvals are granted, the Acquisition is scheduled to close on or before November 30, 2008. The Acquisition Agreement also provides StorageVault with the right to extend the closing of the Acquisition for five 30-day extensions from November 30, 2008.

About the Franchise Rights

The Franchise Rights include the exclusive right for an initial term of 10 years, with four 10 year renewal periods, to develop and operate PUPS Franchise outlets in Canada, and the exclusive license and use of related intellectual property. PUPS Franchises offers proprietary and distinctive portable storage containers and delivery method together with proprietary identifying characteristics in connection with the trademarks "Canadian PUPS" and "PUPS" (portable units portable storage). Pursuant to the Franchise Agreement, StorageVault will pay Canadian PUPS Franchises Inc. a one time cash fee of $20,000 and a continuing monthly royalty of 3.5% of the gross sales in relation to the Franchise Rights and PUPS. Pursuant to the Franchise Agreement, StorageVault is obligated to develop and operate 20 franchises by December 31, 2012 or pay a one-time non-development penalty fee of $15,000 for each undeveloped Franchise. If StorageVault develops 36 Franchises in the initial 10 year term of the Franchise Agreement, StorageVault has the right to purchase the 3.5% Royalty for the present value of the trailing 12 month royalty fee paid, applying a 15% discount rate. In addition, if StorageVault purchases the royalty, pursuant to the Franchise Agreement, it will be deemed to have purchased all of Canadian PUPS Franchises Inc.'s interest in the Franchise Agreement and the Franchise Rights.

Canadian PUPS Franchises Inc. is owned, collectively, as to a 70% interest, by Alan Simpson, the President, Chief Executive Officer and a director of StorageVault, and Glenn Fradette, the Chief Financial Officer and a director of StorageVault, with the remaining 30% owned by a shareholder that is unrelated to StorageVault.

The entering into of the Franchise Agreement is subject to the approval of the shareholders of StorageVault other than the Non-Arm's Length Vendors and their affiliates, and the approval by the TSX Venture in accordance with the applicable policies of the TSX Venture. There can be no assurance that these approvals will be granted.

Termination of Cambridge Acquisition Agreement

StorageVault is also announcing that it has terminated the Acquisition Agreement of Purchase and Sale to acquire from an arm's length vendor a self-storage facility located in Cambridge, Ontario, as previously announced in a press release dated September 12, 2008. The aggregate purchase price was to be $2.45 million and the acquisition was subject to customary due diligence and finance conditions that were not satisfactory to StorageVault in its sole discretion.

StorageVault Canada Inc.

StorageVault currently operates and owns one self-storage property located in Regina, Saskatchewan. StorageVault intends to continue to grow its business through acquisition of additional self-storage properties and organically as master franchisee through the development of portable storage facilities in Canada. The common shares of the Corporation are listed on the TSX Venture.

Forward-Looking Information

This press release contains forward-looking information. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of StorageVault to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the early stage development of StorageVault; capital markets conditions; general business and economic uncertainties; competition; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting StorageVault; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although StorageVault has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The factors identified above are not intended to represent a complete list of the factors that could affect StorageVault. Additional factors are noted under "Risk Factors" in StorageVault's Filing Statement dated April 21, 2008 copies of which may be obtained on the SEDAR website at www.sedar.com. The forward-looking information in this press release should not be relied upon as representing StorageVault's views as of any date subsequent to the date of this press release. Such forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of StorageVault to obtain necessary financing, satisfy conditions under the acquisition agreements, or satisfy any requirements of the TSX Venture with respect to the intended acquisitions of StorageVault and any related private placement; the level of activity in the self-storage business and the economy generally; consumer interest in StorageVault's services and products; competition; and anticipated and unanticipated costs. StorageVault does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • StorageVault Canada Inc.
    Alan Simpson
    President, CEO and Director
    (306) 536-3771 or (306) 546-5999