Mosaic Capital Corporation Enters into Agreement to Acquire Industrial Scaffold Services
Calgary, Alberta CANADA, August 30, 2013 /FSC/ - Mosaic Capital Corporation (TSX-V Symbols: M and M.PR.A), ("Mosaic")is pleased to announce that it has entered into an acquisition agreement to acquire a majority interest in the business being carried on by Industrial Scaffold Services Limited ("Industrial Scaffold"). Industrial Scaffold is a leading provider of worksite surface and access scaffolding solutions to industrial and commercial customers in the energy & utilities, pulp & paper, mining and marine sectors in western Canada. Industrial Scaffold is based in Crofton, B.C. and has offices in Fort St. John, Kitimat and Victoria. On completion of the transaction Mosaic will own 67.5% of the business and members of management will own the remaining 32.5%. Mosaic's cost of acquisition is $15,862,500 and will be funded through a combination of cash and $3.0 million of vendor take back financing. The acquisition is expected to be immediately accretive to Mosaic's free cash flow and distributable cash per common share. The transaction is expected to close in early September 2013.
Established in 2002, Industrial
Scaffold(www.industrialscaffoldservices.ca)is a preferred worksite surface and access scaffold provider for numerous industrial projects within western Canada, providing both scaffolding services and environmental containment services (which is the wrapping of structures such as buildings, industrial infrastructure, ships, and submarines). Industrial Scaffold's commitment to safety, excellent customer service and the provision of highly qualified field supervisory personnel are key elements which keep it at the forefront of its industry.
Alvin Brown, President of Industrial Scaffold stated, "Since inception our focus has been on being a leader in our industry. We ensure that each client's project is executed safely and to the highest level of quality using a highly trained and qualified workforce. We have a number of customers that have been with us for over 10 years due to our high level of service and understanding of their business. Our partnership with Mosaic will allow us to move quickly to grow and diversify into new markets. Mosaic brings strong strategic and business depth to Industrial Scaffold while allowing us to keep the culture and values that have made us successful. I look forward to continuing as President of Industrial Scaffold and moving the company into its next stage of growth."
"Our partnership with Industrial Scaffold follows Mosaic's strategic plan of acquiring established businesses with exceptional management and growing free cash flow. This transaction also continues to add diversification to Mosaic's cash flow," commented Harold Kunik, President of Mosaic. Mr Kunik added, "Al Brown and his management team have built an excellent business that we are proud to be a part of. We see a lot of opportunity for growth of Industrial Scaffold both geographically and by services provided. Industrial Scaffold has been built on integrity, customer service and dedication to employees along with a clear vision for growth. We welcome the Industrial Scaffold team into Mosaic and look forward to a strong and growing partnership."
ABOUT MOSAIC CAPITAL CORPORATION
Mosaic is an investment company based in western Canada that owns a portfolio of established businesses that have a history of generating cash flow from their operations. Mosaic's objective is to create long term value for our shareholders and business partners and to have that reflected in our share price. We believe that this is achieved by growing free cash flow per share and retained earnings. We do this by acquiring businesses that we understand at attractive prices and we manage our risk through extensive due diligence, creative transaction structuring and working closely with our businesses after acquisition.
We strongly encourage the management teams of our operating companies to continue to look for acquisitions that would facilitate their entry into new markets or increase their product or service offerings. We are actively looking for businesses in a variety of industries that fit our investment model.
Our preferred acquisition criteria for such transactions include the following:
. Demonstrated history of growing sustainable cash flow and operating in
an industry which we believe has good growth potential
. A capable and experienced management team that is growth oriented
. The business should have a significant market share in its business
area
. A unique competitive advantage
. Ability to grow the business without significant amounts of new capital
FOR FURTHER INFORMATION PLEASE CONTACT:
Tim Taylor
Vice President, Mosaic Capital Corporation
400, 2424 - 4th Street SW
Calgary, AB T2S 2T4
Tel: (403) 270-4658
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release may contain forward-looking statements and forward-looking information, including statements and information which reflect current expectations regarding the future business outlook for Industrial Scaffold and Mosaic. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements and forward-looking information. More particularly, and without limitation, this news release contains forward-looking statements and information concerning anticipated timing of closing of the Industrial Scaffold acquisition and the expected impact of the acquisition on Mosaic's cash flow. These statements and information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements and information due to these statements and information being subject to a number of risks and uncertainties. Undue reliance should not be placed on these forward-looking statements and forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements and information involve numerous assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, projections and other forward-looking statements and information will not occur. These risks and uncertainties include, but are not limited to, general business and economic conditions in geographic areas where Industrial Scaffold has operations; pricing pressures and other competitive factors; third parties failing to honour their contractual obligations with Industrial Scaffold; procurement and pricing issues with suppliers; unforeseen cost overruns on Industrial Scaffold's projects; legislative or regulatory developments; the continued availability and cost of qualified labour; and the continued ability to secure new business. Should any of the risks or uncertainties facing Industrial Scaffold materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results, performance, activities or achievements of both Industrial Scaffold and Mosaic could vary materially from those expressed or implied by the forward-looking statements or information contained in this document.
Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in reports on file with applicable securities regulatory authorities (including, in particular, Mosaic's most recent annual information form) and may be accessed through the SEDAR website (www.sedar.com)under the profile for Mosaic.
Although Mosaic believes that the expectations represented by any forward-looking-statements and forward-looking information contained herein are reasonable based on the information available to them on the date of this document, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements or forward-looking information. Any forward-looking statements or information herein contained is made as of the date of this press release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.
Mosaic Capital Corporation
400, 2424 - 4th Street SW
Calgary, Alberta T2S 2T4
To view this press release as a PDF file click onto the following link:
http://www.usetdas.com/pr/MosaicAug302013.pdf
Source: Mosaic Capital Corporation (TSXV: M - TSXV: M.PR.A)
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