HALIFAX, Jan. 30, 2014 /CNW/ - Clarke Inc. ("Clarke") (TSX: CKI, CKI.DB.A) is pleased to announce that it has entered into a definitive agreement to sell its commercial tank and home heating business ("Gestion Jerico") to TerraVest Capital Inc. ("TerraVest"). The transaction values Gestion Jerico at an enterprise value of $54.0 million. Clarke will receive $24.9mn for its 75% interest in Gestion Jerico in the form of a 6.5% promissory note with a 3-year term.
George Armoyan, Chief Executive Officer of Clarke stated: "We have worked with Charles Pellerin and Pierre Fournier to grow Gestion Jerico from its roots as a residential oil tank business to a diversified residential and commercial tank business. The result is a diversified tank business with multiple product lines and 20x the EBITDA as when we acquired this business." Mr. Armoyan added: "We believe this transaction strengthens TerraVest, part of which we own, by creating a more diversified company, generating cross-selling opportunities and other revenue synergies and providing Gestion Jerico with a base of operations from which to expand into Western Canada. We wish Charles and Pierre and the rest of the team all the best as they join the TerraVest organization. We believe this transaction will greatly benefit both companies."
The acquisition, which is expected to close in February 2014, is subject to customary closing conditions for a transaction of this nature, including acceptance and final approval by the Toronto Stock Exchange. A material change report in respect of this acquisition will be filed by Clarke but will not be filed earlier than 21 days prior to the closing of the acquisition as Clarke wishes to complete the acquisition as soon as commercially feasible once all necessary approvals have been obtained.
Clarke remains focused on creating shareholder value, stream lining its asset base and simplifying its financial statements. The divestiture of Gestion Jerico helps accomplish these goals for Clarke, while positioning TerraVest for growth. Following the close of this transaction, Clarke continues to own its investment segment and the ferry and container shipping units.
Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance performance and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for more information about Clarke, please visit our website at www.clarkeinc.com.
This press release may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke, the use of the proceeds of the transaction and the estimated gain and the increase in book value per share as a result of the transaction. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. These forward-looking statements include, but are not limited to, statements regarding the trading price of the Company's securities not fully reflecting the value of the Company's business, the estimated gain from the transaction and the increase in book value per share as a result of the transaction.
Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Clarke to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, and interest rates and foreign currency fluctuations. Although Clarke has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Clarke does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE Clarke Inc.
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Clarke Inc. announces the sale of its commercial tank and home heating business
Jan 30, 2014, 09:11 EST