Strongco Corporation

Strongco Corporation

February 18, 2011 06:00 ET

Strongco Announces Closing of Acquisition of Chadwick-BaRoss, Inc.

Acquisition Expands Strongco Into U.S.

MISSISSAUGA, ONTARIO--(Marketwire - Feb. 18, 2011) - Strongco Corporation (TSX:SQP) today announced that it has completed the acquisition of 100% of the shares of Chadwick-BaRoss, Inc. for US$11.6 million. 

The transaction value was satisfied with cash of US$9.7 million and notes issued to the major shareholders of Chadwick-BaRoss totalling US$1.9 million. In connection with the acquisition, Strongco obtained a $5.0 million term loan through its current bank.

Chadwick-BaRoss is a heavy equipment dealer headquartered in Westbrook, Maine, with three branches in Maine and one in each of New Hampshire and Massachusetts. In the fiscal year ended January 31, 2011, Chadwick-BaRoss was profitable on sales of approximately US$44 million. EBITDA for the year was approximately US$3.6 million.

"The acquisition of Chadwick-BaRoss is in line with our growth strategy and we expect it to be accretive to Strongco's earnings in 2011," said Robert Dryburgh, President and Chief Executive Officer of Strongco. 

About Strongco

Strongco Corporation is one of Canada's largest multiline mobile equipment dealers and operates in the North East United States, through Chadwick-BaRoss, Inc. Strongco sells, rents and services equipment used in sectors such as construction, infrastructure, mining, oil and gas, utilities, municipalities, waste management and forestry. Strongco has approximately 600 employees servicing customers from 26 branches in Canada and 5 in the United States. Strongco represents leading equipment manufacturers with globally recognized brands, including Volvo Construction Equipment, Case Construction, Manitowoc Crane, Terex Cedarapids, Ponsse, Powerscreen, Skyjack, Fassi, Allied, Taylor, ESCO, Dressta, Sennebogen, Takeuchi, Link-Belt and Kawasaki. Strongco is listed on the Toronto Stock Exchange under the symbol SQP.

Forward-Looking Statements

This news release contains "forward-looking" statements within the meaning of applicable securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Strongco or industry results, to be materially different from any future results, events, expectations, performance or achievements expressed or implied by such forward-looking statements.

All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. Forward-looking statements typically contain words or phrases such as "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. This news release contains forward-looking statements regarding the expected accretive nature of the acquisition of the shares of Chadwick-BaRoss, and such statements are based upon the expectations of management.

Forward-looking statements involve numerous assumptions and should not be read as guarantees of future performance or results. Such statements will not necessarily be accurate indications of whether or not such future performance or results will be achieved. You should not unduly rely on forward-looking statements as a number of factors, many of which are beyond the control of Strongco, could cause actual events or results to differ materially from the events or results discussed in the forward-looking statements, including, general economic conditions; business cyclicality, relationships with manufacturers; access to products; competition with existing business; reliance on key personnel; litigation and product liability claims; inventory obsolescence; sufficiency of credit availability; credit risks of customers; warranty claims; technology interpretations; and labour relations. Although the forward-looking statements contained in this news release are based upon what management of Strongco believes are reasonable assumptions, Strongco cannot assure investors that actual performance or results will be consistent with these forward-looking statements. These statements reflect current expectations regarding future events and operating performance and are based on information currently available to Strongco's management. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements and outlook are made as of the date of this news release and, except as required by applicable law, Strongco assumes no obligation to update or revise them to reflect new events or circumstances.

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