TSX Venture Exchange
Symbol "BRY"
EDMONTON, June 4 /CNW/ - Bri-Chem Corp. (the "Bri-Chem") (TSX Venture Exchange: BRY) a leading Canadian wholesale distributor of drilling fluids, products and services, is pleased to announce that it has entered into a letter of intent (the "Letter of Intent") to acquire Millennium Technologies Ltd. ("Millennium"), a Western Canadian-based full-service chemical products wholesaler. Under the terms of the Letter of Intent, Bri-Chem has agreed to make an offer to purchase (the "Proposed Acquisition") all of the issued and outstanding shares of the parent holding company and related party loans of Millennium in consideration for an aggregate purchase price of $4,500,000.
The total purchase price of $4,500,000 consists of $3,000,000 cash payable as to $2,700,000 on closing, $300,000 fourteen months from closing and $1,500,000 by way of the issuance of 600,000 common shares at a price of $2.50 per share. The Proposed Acquisition also incorporates 100,000 share purchase warrants issued to the vendors. Each share purchase warrant entitles the holder to purchase one common share of Bri-Chem at a price of $2.50 per common share for a period of three years from the close of the Proposed Acquisition. Bri-Chem management believes the acquisition of Millennium will be immediately synergistic and will provide new customers, broader territorial coverage specifically in Saskatchewan, and inventory warehouse consolidation.
Millennium is a private corporation duly incorporated and validly existing under the laws of the Province of Alberta having its head office in Calgary, Alberta. Unaudited figures from Millennium's operations for the fiscal year ended September 30, 2006 were total assets of $8,246,083, net working capital of $1,826,028, sales of $11,434,833 and pretax earnings of $651,536. Millennium currently supplies over 200 drilling fluid, environmental and production chemical products to a customer base primarily located in the Western Canada. Since 1999, Millennium has developed a diversified product mix and built-up a strong outside sales staff who provide customers with the finest possible service and technical advice.
About Bri-Chem
Bri-Chem operates out of its head office located in Acheson, Alberta and its principal activity is the wholesale/distribution blending and packaging of drilling fluid supplies for the oil and gas industry. Bri-Chem provides over 100 domestic and foreign products to customers throughout Alberta, British Columbia and Saskatchewan.
Forward Looking Statements
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "anticipate", "believe", "will", and similar expressions and statements relating to matters that are not historical facts are forward looking statements. Such forward looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Bri-Chem to be materially different from any future results, performances or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to, fluctuations in oil and gas activity levels, political and economic conditions, and the demand for products provided by Bri-Chem.
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