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I'm Mittita Barber for InvestmentPitch.com
Aveda Transportation and Energy Services, symbol "AVE" on the TSX Venture Exchange,
continues to grow its market share, closing its previously announced acquisition of Williston,
North Dakota-based M&K Hotshot & Trucking and M&K Rig Service.
Aveda provides specialized transportation services and equipment required for the exploration,
development and production of petroleum resources in the Western Canadian Sedimentary Basin
and in the United States, principally in and around the states of Texas and Pennsylvania.
With this acquisition, Aveda becomes a player in the Williston Basin, with the addition
of approximately 170 pieces of oilfield hauling equipment, including 79 trailers, 15 conventional
tractors, 14 winch trucks and 3 cranes, and approximately 395 pieces of rental equipment.
The purchase price is anticipated to be between US$38 million and US$42 million, with an anticipated
US$9 million in earnout consideration if certain EBITDA targets are met.
This follows the November acquisition of Edson, Alberta-based Belair Rentals, which allowed
Aveda to raise its profile in the Cardium formation and in the Montney and Duvernay
shales.
As is typical with Aveda's recent acquisitions, current M&K owners, management and nearly
90 staff will join the Aveda team.
Kevin Roycraft, President & CEO stated "With the completion of the acquisition we can focus
on growing our US business in a high activity, oil-focused basin where rig counts have remained
fairly stable over the last few quarters. As we work to integrate M&K's assets and team,
we will look to rapidly realize operational synergies and benefit from our growing brand
recognition and increased scale."
The company continues to attract the attention of the investment community, having closed
a bought deal private placement financing through a syndicate of underwriters co-led
by Cormark Securities and Beacon Securities and including Clarus Securities, Mackie Research
Capital, Dundee Securities and GMP Securities.
This financing, consisted of 6.4 million subscription receipts, priced at $3.60, raised gross proceeds
of approximately $23 million.
Upon the closing of this M&K acquisition, these subscription receipts have converted
into common shares.
Aveda's revenue for the 3 months ended September 30, 2013 grew by almost $3.5 million to $23.4
million, compared with revenue of $19.9 million for the same period on 2012.
Aveda has reported 14 consecutive quarters of record revenue growth as compared to the
same period of the prior year.
Bharat Mahajan, Vice President of Finance and CFO recently stated "Completing this acquisition
essentially doubles the size of the company on an EBITDA basis, adding valuable scale,
stability and further geographic diversity to our US operations."
The company has stated that it is continuing to actively pursue a number of other acquisition
opportunities, and recently strengthened its balance sheet with the increase of its current
operating facility with PNC Bank Canada Branch to $75 million.
It also recently converted the principal amount of $4.72 million of convertible debentures
held by Werklund Capital Corporation into common shares.
For more information, and a list of the analysts that cover the company, please visit the company's
website www.avedaenergy.com, contact Bharat Mahajan CFO at 403-264-5769 or email bharat.mahajan@avedaenergy.com.
Please also review Aveda's MD & A and news releases for a detailed list of risk factors.
I'm Mittita Barber for InvestmentPitch.com For more video news, and to view our disclaimer,
be sure to visit our website www.investmentpitch.com. This video is for information purposes only
and it is not a recommendation to buy or sell any securities.