Trimac Announces Agreement to Purchase Interest in Northern Resource Trucking
CALGARY, Feb. 7, 2012 /PRNewswire/ - Trimac Transportation Ltd. ("Trimac") (TSX: TMA) announced today that it has entered into an agreement to acquire a 29% interest in Northern Resource Trucking Limited Partnership ("NRT") for a purchase price of $9,000,000. The transaction will be a cash and share transaction with $1,000,000 of the purchase price being satisfied in cash and $8,000,000 of the purchase price being satisfied by the issuance of Class A Common Shares of Trimac, subject to the approval of the Toronto Stock Exchange (the "TSX"). The issue price per Class A Common Share will be equal to the ten day volume weighted average closing price of the Class A Common Shares on the TSX for the 10 trading days immediately prior to closing. Based on the closing market price of the Class A Common Shares on the TSX on Friday, February 3, 2012 of $4.30, it is estimated that approximately 1,860,465 Class A Common Shares will be issued, representing approximately 7.3% of the total number of voting shares of Trimac currently outstanding on a non-diluted basis. It is expected that the transaction will close on or about March 19, 2012.
NRT provides trucking services primarily to the uranium mining industry in Northern Saskatchewan. NRT has also been a valuable and reliable business partner for Trimac over the years providing overflow subcontractor support to Trimac's key customers in a variety of product lines. NRT has approximately 80 tractors, 140 trailers and 150 employees and owner operators. NRT is based out of Saskatoon, Saskatchewan.
Trimac is purchasing the interests in NRT from Trimac Investments Limited Partnership ("TILP"), which acquired the interests in 2005 in connection with the formation of Trimac Income Fund. In addition to TILP, the NRT limited partners are comprised of a group of ten First Nations and Métis partners from communities across Northern Saskatchewan. Predecessor entities and affiliates of Trimac have been partners in NRT or predecessors thereof since 1986.
In commenting on the transaction, Ed Malysa, President and Chief Operating Officer of Trimac and a current director of NRT, remarked "NRT is a strategic partner that is the leader in bulk transportation in Northern Saskatchewan. By exploiting Trimac's expertise and NRT's strong market position, the acquisition is expected to provide accretive earnings to Trimac."
TILP is a wholly owned subsidiary of Trimac Holdings Ltd. ("Trimac Holdings"), the principal shareholder of Trimac. Trimac Holdings is controlled by Jeffrey J. McCaig, the Chairman and Chief Executive Officer of Trimac. The transaction was reviewed and unanimously approved by the independent directors of Trimac, who also secured third party financial advice on the value of the transaction.
Based on the current market price of the Class A Common Shares, it is anticipated that the transaction will increase the total number of outstanding voting shares of Trimac beneficially owned, directly or indirectly, or controlled by Jeffrey J. McCaig, on a fully diluted basis, including the voting shares owned by Jeffrey J. McCaig indirectly through Trimac Holdings, from 45.41% to 49.06%.
About Trimac: Trimac is Canada's largest provider of bulk trucking services with operations from coast to coast. In addition, through its National Tank Services division, Trimac performs repairs, maintenance and tank-trailer cleaning services for both the Trimac fleet and for third party commercial customers. Trimac also provides third party transportation logistics services in Canada and the United States through its wholly owned subsidiary Bulk Plus Logistics.
This press release contains information and statements of a forward-looking nature concerning the accretive value of the NRT acquisition to Trimac. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. In making such statements, Trimac has assumed that NRT's results would be consistent with historical levels. Certain factors may cause actual results to differ from such statements including, without limitation, general market trends and conditions, increased competition and a decrease in demand for the products of the uranium mining industry. As a result, readers are advised that actual results may differ from expected results.
SOURCE Trimac Transportation Ltd.