Texada Software Inc.

Texada Software Inc.

August 02, 2011 09:18 ET

Texada Software Inc. Announces Significant Acquisitions and Private Placement

GUELPH, ONTARIO--(Marketwire - Aug. 2, 2011) - Texada Software Inc. (TSX VENTURE:TXS) (the "Company") is pleased to announce that the Company's wholly-owned U.S. subsidiary has entered into non-binding agreements (the "Agreements") to acquire the operating assets of two U.S. based businesses: (i) Rolls Scaffold & Equipment Inc., dba Rolls High Reach, Inc. ("Rolls"), a Southern California-based four location, 50 employee aerial equipment rental business, which was established in 1958 (the "SoCal Acquisition") and (ii) DixEquip Inc. ("DixEquip"), a Houston, Texas-based single location construction equipment dealership business, which has exclusive dealership and territories for Mustang, Donkey and LiuGong (the "DixEquip Acquisition").

The SoCal Acquisition is expected to be accomplished through two separate transactions, namely: a) the acquisition of certain rental fleet and other operating business assets (excluding scaffolding assets which will be retained by Rolls) from Rolls for cash and assumed liabilities totaling approximately US $1.1 million; and b) the acquisition of rental fleet from an existing lender. The lender will be providing term financing of approximately US$9.6 million (the "Lender Financing") in conjunction with this acquisition, repayable over a 48 month period and additional rental fleet financing post-closing, to assist the Company in the expansion of its rental fleet. The combination of a) and b) result in total consideration for the SoCal Acquisition by the Company of approximately US $10.7 million.

The total consideration for the DixEquip assets is expected to be approximately US $0.8 million. If completed, substantially all of the purchase price of the assets being acquired, including equipment held for resale, rental fleet and other operating assets, will be satisfied by the assumption of existing trade debt and floor plan financing.

The Agreements are subject to certain customary conditions in favor of the Company, including the completion of satisfactory due diligence, regulatory approvals, financing and other matters. It is expected that the SoCal Acquisition will be completed no later than August 31, 2011. The DixEquip Acquisition is expected to be completed later this year. There can be no assurance that these transactions will be completed as proposed or at all.

"These transactions mark a very significant milestone for Texada," said William Swisher, the Company's Chief Executive Officer. He added, "the Board of Directors mandated that we seek out the best strategic transactions for Texada to generate additional shareholder value and secure Texada's future, and we believe the SoCal and DixEquip acquisitions represent a compelling platform to successfully achieve this goal. The vertical integration of Texada into the equipment rental and dealership space will be an added benefit for all the Company's stakeholders, including our existing customer base and valued employees." Added Brian Spilak, Texada's President, "the additional size and scope of our business will allow us to grow and enhance our existing delivery platform to all our customers, enriching our existing offerings for the benefit of everyone. Texada is a trusted brand and we have established clear strategic boundaries between the software business unit and future corporately owned equipment operations, ensuring our current and future customers can rely on the trusted brand we have built at Texada."

The vertical integration of the Company's operations into the rental equipment and dealership businesses is not without risk. These risks include, but are not limited to, the considerable financial leverage and annual debt repayment requirements relative to anticipated cash flows, the execution of an operational turnaround for both acquisitions, the effect on operations as a result of any reaction of the Company's rental industry competitors to its expansion into the rental equipment sector, the reaction of the Company's existing equipment rental customers for its asset management software and the availability of additional capital to grow the rental and dealership businesses beyond the platform of the initial acquisitions. There can be no assurances that sufficient capital will be available on acceptable terms and conditions, or at all.

Further information on the businesses can be found at the following websites: www.rollsscaffold.com and www.dixequip.com. The Company is not responsible for any information included at these websites.

The Company also announced today a non-brokered private placement (the "Private Placement") of up to 40,000,000 common shares of the Company (the "Common Shares") at a price of $0.10 per share for anticipated gross proceeds of up to $4,000,000. The Company intends to use the net proceeds of the Private Placement to satisfy certain liquidity conditions of the Lender Financing in connection with the SoCal Acquisition, to acquire additional rental fleet for both businesses, and for working capital purposes. Insiders of the Company will be subscribing for greater than 25% of the Private Placement, on the same terms as arm's length investors. The Private Placement is expected to close on or about August 15, 2011 and may close within 21 days of such date, if management of the Company determines it is reasonable or necessary in the circumstances. The Private Placement is subject to receipt of all required regulatory and TSX Venture Exchange (TSX VENTURE) approvals.

The Common Shares issued in connection with the Private Placement, will be subject to a hold period of four months and one day from the date of distribution under applicable securities laws.

More information may be found at www.sedar.com.

About Texada Software Inc. (TSX VENTURE:TXS)

Texada Software Inc. is the premier provider of enterprise software solutions for equipment rental and mobile equipment. Texada's solutions are fully flexible and scalable to meet the unique needs of any sized operation and are backed by proven implementation, services and support.

Texada's market-driven software products combine knowledge and best practices from over 5,000 users worldwide, resulting in solutions that manage the complete asset life-cycle from acquisition through to disposal. The Company's customers enjoy the many benefits of this enhanced efficiency through better asset utilization, effective location tracking, and optimized scheduling.

This news release may contain forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan, "estimate", "expect", "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting acceptance of and demands for new products, the impact of the products and pricing strategies of competitors, delays in developing and launching new products, fluctuations in operating results and other risks, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industry; others are more specific to the Company. Ongoing public filings should be consulted for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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