New West Energy Services announces agreement to purchase oilfield services company
- Closing of the Transaction is expected to occur on or about September 30, 2013 and is subject to certain conditions including, but not limited to, receiving the approval of the TSX Venture Exchange.
New West Energy Services Inc. (TSX VENTURE:NWE) announce that it has entered into a share purchase agreement with the shareholders (the "Vendors") of 1770245 Alberta Ltd. ("1770245"), Tippin D Oilfield Services Ltd. ("Tippin D") and 40 Creek Oilfield Services Ltd. ("40 Creek") providing for the purchase by the Corporation of all of the issued and outstanding common shares of 1770245 for an aggregate purchase price of $1.8 million, to be comprised of $1.3 million in cash, the issuance of 3,000,000 common shares in the capital of the Corporation at a deemed price of $0.10 per share and a post-closing payment of up to $200,000 which is payable as an earn out upon achieving certain performance thresholds over a twelve month period post close (the "Transaction"). Closing of the Transaction is expected to occur on or about September 30, 2013 and is subject to certain conditions including, but not limited to, receiving the approval of the TSX Venture Exchange.
Summary of Acquisition
The Vendors, Tippin D and 40 Creek, all arm's length parties, operate private businesses in the oilfield services industry predominantly in the Peace region of Alberta, providing combination, hydrovac and boiler truck services to the completions and production sectors of the oil and gas industry. Substantially all of the assets of Tippin D and 40 Creek will be transferred to 1770245 prior to the closing of the Transaction.
"We have been looking for an opportunity to expand our service into the combination/hydrovac sector which will allow us to diversify from drilling related services into the production side of the oil and gas business", said Gerry Kerkhoff, President and CEO of New West. "With this acquisition, we expect to gain the knowledge and expertise required to expand this new service into our other service centres as well as operate our existing services from this base in Beaverlodge, Alberta, opening a new market with access to major oil and gas plays in Northwest Alberta and Northeast British Columbia."
The new service will operate under the name Bearstone Vacuum Services which is a division of the wholly owned subsidiary BearStone Environmental Solutions Inc. Tippin D and 40 Creek have fixed assets of approximately $930,000 and, for the 12 months ended June 30, 2013, revenue of approximately $2.1 million and earnings before tax of approximately $721,000. Daniel Huys, the Founder and President of Tippin D, 40 Creek and 1770245, will serve as an Area Manager for Bearstone Vacuum Services.
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