(via Thenewswire.ca)
May 2, 2016 / TheNewswire / Kelowna, British Columbia: Decisive Dividend Corporation (TSX-V: DE) ("Decisive" or the "Corporation"), a growth oriented acquisition company listed on the TSX Venture Exchange (the "TSXV"), is pleased to announce its proposed acquisition of Unicast Inc. ("Unicast"), a company based in Kelowna, British Columbia which designs, manufactures and markets wear parts for the mining, aggregate and cement industries.
Share Purchase Agreement
Decisive and the current shareholders of Unicast (the "Vendors") are parties to a share and loan purchase agreement dated April 29, 2016 (the "Share Purchase Agreement") pursuant to which Decisive and its wholly-owned subsidiary agreed to purchase all of the issued and outstanding shares of Unicast (and certain shareholder loans of its shareholders) for a purchase price of $11,000,000 (the "Purchase Price"), subject to closing adjustments for indebtedness and working capital.
The Purchase Price is proposed to be satisfied through the issuance of common shares of Decisive ("Decisive Shares") having a value of $1,551,000, with the balance of $9,449,000 paid in cash.
Decisive intends to finance the cash portion of the Purchase Price from the proceeds of a private placement of Decisive Shares (the "Private Placement") (with targeted gross proceeds of $5,000,000) and a $5,500,000 debt financing from Decisive's senior lender (the "Debt Financing").
With respect to the share consideration, the Decisive Shares will be issued to the Vendors at the same price of the Decisive Shares issued pursuant to the Private Placement. Decisive is currently negotiating the terms of the Private Placement with an investment dealer with a view to engaging the dealer to raise targeted gross proceeds of $5,000,000 at a price of $3.00 per Decisive Share. In such event, the Vendors would receive an aggregate of 517,000 Decisive Shares in satisfaction of the share consideration under the Share Purchase Agreement.
Closing is anticipated to occur on or about June 17, 2016 and is subject to a number of closing conditions, including the successful completion of the Private Placement and the Debt Financing, as well as receipt of the approval of the TSXV.
About Unicast
Unicast designs, manufactures and markets wear parts for the mining and cement industries. Founded in 1994, it has 17 employees working in an 8,440 square foot manufacturing facility in Kelowna, British Columbia. In 2012, Unicast introduced titanium carbide (TiC) wear parts for the mining and cement industries, which provide much longer wear life than other comparatives in these industries. Currently Unicast believes that it is the only company that offers TiC wear parts in North America. In 2014, in response to customer demand, Unicast introduced a new two-way valve product for the cement industry, which positions Unicast as only one of two suppliers of two-way valve solutions for cement plants in North America.
Currently, 80% of Unicast's sales are to purchasers in the United States, approximately 10% of sales are in Canada with the remaining 10% in other countries. Unicast supplies wear parts and valves to all four multi-national cement companies operating in North America. Its growing distributor base includes six distributors in Canada, seven distributors in the United States and three distributors in other countries.
The management team of Unicast is led by its founder, Mr. Gerry L'Esperance, who will remain as President of Unicast following the acquisition.
Summary of Unicast Financial Information
The following financial information of Unicast is based upon unaudited financial statements and internally-prepared financial information provided to Decisive by the Vendors.
|
10-month period June 1, 2015 - March 31, 2016 |
Financial Year Ended |
|||
|
May 31, 2015 |
May 31, 2014 |
May 31, 2013 |
||
|
Total Assets |
$6,030,918 |
$4,759,632 |
$3,829,840 |
$3,354,081 |
|
Total Liabilities |
$913,098 |
$1,496,619 |
$1,094,008 |
$1,046,097 |
|
Revenue |
$6,562,989 |
$8,652,159 |
$7,254,908 |
$7,742,428 |
|
Gross Profit |
$3,212,250 |
$3,682,190 |
$3,150,115 |
$3,238,633 |
|
Reported Income |
$2,164,755* |
$2,163,411 |
$2,036,739 |
$2,105,588 |
|
Reported EBITDA |
$2,228,862 |
$2,265,186 |
$2,103,856 |
$2,172,324 |
*Includes an estimated $62,971 of depreciation for the 10-month period.
"We are very excited about the acquisition of Unicast," stated James Paterson, CEO of Decisive. "The company services three very distinct market areas in the mining, aggregate and cement industries with its unique and long-lasting wear part solutions and offers excellent customer service and very competitive prices. We are also very excited that we are buying a company that competes in a market that experiences $20 billion per year in world-wide sales. Unicast, with its experience and specialized capabilities, is well positioned to take advantage of the many growth opportunities that are available in this large and diverse market. While we are excited about Unicast's proven product advantages, it is the strength of the management team led by Gerry L'Esperance that is truly exceptional. They have built a team that is extremely professional and hard-working, and we believe they will be the engine to grow Unicast in the future. We welcome Gerry and Unicast to the Decisive team and know they will be an important part of our future going forward."
Gerry L'Esperance, the President of Unicast stated, "we have built a diverse company which fits in well with Decisive's business model. They recognize how Unicast has grown over the years through the multiple markets we service, and have expressed their confidence in our team and their commitment to helping us reach our next phase of growth. The Unicast team built a solid foundation upon which to grow, and we are proud of our success. We are pleased that Decisive will allow us to achieve our goals for the future. This is an exciting transaction for Unicast and we look forward to being part of the Decisive family."
About Decisive Dividend Corporation
Decisive currently owns the Blaze King group of companies. The common shares of Decisive trade on the TSXV under the trading symbol "DE".
The TSXV has not in any way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr. David Redekop, Chief Financial Officer
#104, 1420 St. Paul Street
Kelowna, BC V1Y 2E6
Telephone: (250) 870-9146
Cautionary Statements
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on management's current beliefs, assumptions and expectations as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this press release contains forward-looking information relating to the completion of the proposed acquisition, the required financings by the Corporation and the anticipated benefits to the Corporation. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: the failure to complete the proposed acquisition, the failure to successfully complete the financings referenced herein and all other risks associated with the businesses carried on by operating subsidiaries of the Corporation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Non-GAAP Financial Measures
EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization. EBITDA is not a defined performance measure under International Financial Reporting Standards (IFRS) but it is used by management of the Corporation to assess the performance of the Corporation and its segments.
No Dissemination in the United States
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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