Texada Software Inc. Announces Significant Acquisitions and Private Placement
02 August 2011 - 11:17PM
Marketwired
Texada Software Inc. (TSX VENTURE: TXS) (the "Company") is pleased
to announce that the Company's wholly-owned U.S. subsidiary has
entered into non-binding agreements (the "Agreements") to acquire
the operating assets of two U.S. based businesses: (i) Rolls
Scaffold & Equipment Inc., dba Rolls High Reach, Inc.
("Rolls"), a Southern California-based four location, 50 employee
aerial equipment rental business, which was established in 1958
(the "SoCal Acquisition") and (ii) DixEquip Inc. ("DixEquip"), a
Houston, Texas-based single location construction equipment
dealership business, which has exclusive dealership and territories
for Mustang, Donkey and LiuGong (the "DixEquip Acquisition").
The SoCal Acquisition is expected to be accomplished through two
separate transactions, namely: a) the acquisition of certain rental
fleet and other operating business assets (excluding scaffolding
assets which will be retained by Rolls) from Rolls for cash and
assumed liabilities totaling approximately US $1.1 million; and b)
the acquisition of rental fleet from an existing lender. The lender
will be providing term financing of approximately US$9.6 million
(the "Lender Financing") in conjunction with this acquisition,
repayable over a 48 month period and additional rental fleet
financing post-closing, to assist the Company in the expansion of
its rental fleet. The combination of a) and b) result in total
consideration for the SoCal Acquisition by the Company of
approximately US $10.7 million.
The total consideration for the DixEquip assets is expected to
be approximately US $0.8 million. If completed, substantially all
of the purchase price of the assets being acquired, including
equipment held for resale, rental fleet and other operating assets,
will be satisfied by the assumption of existing trade debt and
floor plan financing.
The Agreements are subject to certain customary conditions in
favor of the Company, including the completion of satisfactory due
diligence, regulatory approvals, financing and other matters. It is
expected that the SoCal Acquisition will be completed no later than
August 31, 2011. The DixEquip Acquisition is expected to be
completed later this year. There can be no assurance that these
transactions will be completed as proposed or at all.
"These transactions mark a very significant milestone for
Texada," said William Swisher, the Company's Chief Executive
Officer. He added, "the Board of Directors mandated that we seek
out the best strategic transactions for Texada to generate
additional shareholder value and secure Texada's future, and we
believe the SoCal and DixEquip acquisitions represent a compelling
platform to successfully achieve this goal. The vertical
integration of Texada into the equipment rental and dealership
space will be an added benefit for all the Company's stakeholders,
including our existing customer base and valued employees." Added
Brian Spilak, Texada's President, "the additional size and scope of
our business will allow us to grow and enhance our existing
delivery platform to all our customers, enriching our existing
offerings for the benefit of everyone. Texada is a trusted brand
and we have established clear strategic boundaries between the
software business unit and future corporately owned equipment
operations, ensuring our current and future customers can rely on
the trusted brand we have built at Texada."
The vertical integration of the Company's operations into the
rental equipment and dealership businesses is not without risk.
These risks include, but are not limited to, the considerable
financial leverage and annual debt repayment requirements relative
to anticipated cash flows, the execution of an operational
turnaround for both acquisitions, the effect on operations as a
result of any reaction of the Company's rental industry competitors
to its expansion into the rental equipment sector, the reaction of
the Company's existing equipment rental customers for its asset
management software and the availability of additional capital to
grow the rental and dealership businesses beyond the platform of
the initial acquisitions. There can be no assurances that
sufficient capital will be available on acceptable terms and
conditions, or at all.
Further information on the businesses can be found at the
following websites: www.rollsscaffold.com and www.dixequip.com. The
Company is not responsible for any information included at these
websites.
The Company also announced today a non-brokered private
placement (the "Private Placement") of up to 40,000,000 common
shares of the Company (the "Common Shares") at a price of $0.10 per
share for anticipated gross proceeds of up to $4,000,000. The
Company intends to use the net proceeds of the Private Placement to
satisfy certain liquidity conditions of the Lender Financing in
connection with the SoCal Acquisition, to acquire additional rental
fleet for both businesses, and for working capital purposes.
Insiders of the Company will be subscribing for greater than 25% of
the Private Placement, on the same terms as arm's length investors.
The Private Placement is expected to close on or about August 15,
2011 and may close within 21 days of such date, if management of
the Company determines it is reasonable or necessary in the
circumstances. The Private Placement is subject to receipt of all
required regulatory and TSX Venture Exchange (TSX VENTURE)
approvals.
The Common Shares issued in connection with the Private
Placement, will be subject to a hold period of four months and one
day from the date of distribution under applicable securities
laws.
More information may be found at www.sedar.com.
About Texada Software Inc. (TSX VENTURE: TXS)
Texada Software Inc. is the premier provider of enterprise
software solutions for equipment rental and mobile equipment.
Texada's solutions are fully flexible and scalable to meet the
unique needs of any sized operation and are backed by proven
implementation, services and support.
Texada's market-driven software products combine knowledge and
best practices from over 5,000 users worldwide, resulting in
solutions that manage the complete asset life-cycle from
acquisition through to disposal. The Company's customers enjoy the
many benefits of this enhanced efficiency through better asset
utilization, effective location tracking, and optimized
scheduling.
This news release may contain forward-looking statements which
reflect the Company's current expectations regarding future events.
The forward-looking statements are often, but not always,
identified by the use of words such as "seek", "anticipate", "plan,
"estimate", "expect", "intend" and statements that an event or
result "may", "will", "should", "could" or "might" occur or be
achieved and other similar expressions. These forward-looking
statements involve risk and uncertainties, including the difficulty
in predicting acceptance of and demands for new products, the
impact of the products and pricing strategies of competitors,
delays in developing and launching new products, fluctuations in
operating results and other risks, any of which could cause
results, performance, or achievements to differ materially from the
results discussed or implied in the forward-looking statements.
Many risks are inherent in the industry; others are more specific
to the Company. Ongoing public filings should be consulted for
additional information on risks and uncertainties relating to these
forward-looking statements. Investors should not place undue
reliance on any forward-looking statements. Management assumes no
obligation to update or alter any forward-looking statements
whether as a result of new information, further events or
otherwise.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Texada Software Inc. 1-800-361-1233 or 1-519-836-7073
www.texadasoftware.com Corporate communications contact: Texada
Software Inc. Jim McInnis CFO 1-800-361-1233 x - 2104
jmcinnis@texadasoftware.com
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