OTTAWA, Aug. 17 /CNW Telbec/ - Clearford Industries Inc., (Clearford, or the Company) (TSX-V: CLI), and Return on Innovation (ROI) Advisors Ltd. ("ROI Advisors") in its capacity as investment advisor of ROI Fund Inc. ("ROI Fund" or the "Fund") announced today that ROI Advisors, on behalf of ROI Fund, has accepted a conditional offer by Clearford to acquire Brooklin Concrete Inc. ("Brooklin"), which is wholly owned by the Fund. Clearford has until November 30th, 2005 to close the purchase.
The total enterprise value attributed to Brooklin in the transaction is $31.25 million. Under the offer Clearford will pay in cash to ROI Fund approximately $18.25 million and assume obligations of Brooklin for the remainder of the enterprise value. Brooklin is a manufacturer of precast concrete products based in Brooklin Ontario, with facilities also located in Newmarket, Huntsville and Haliburton Ontario.
Brooklin's revenues for the past fiscal year were approximately $20 million with a growth rate over the past three years of above 10%. Normalized EBITDA for the past fiscal year was approximately $6.1 million. One of Brooklin's product lines, accounting for more than 20% of its revenues is septic tanks.
Clearford is a supplier of waste water collection systems under the trade name SBSO. These systems use concrete clarifiers located at each collection point to collect solid waste at the source and flexible piping to transport the liquid waste to the central treatment facility. The SBS system produces an enhanced environmental benefit at approximately one third lower cost than traditional waste collection systems which transport both solids and waste from each collection point to the central treatment facility.
Mr. Rod Bryden, Chairman of Clearford commented. "The operating team at Brooklin has created a business that is recognized for outstanding product quality and as a result of their focus on excellence have been rewarded with consistently increasing revenues and profitability. Clearford was attracted to this acquisition opportunity for those reasons and the opportunity to enhance the growth and profitability of both Clearford and Brooklin in a merged Corporation."
Mr. Rod Bryden is the Chairman and controlling shareholder of SC Stormont. SC Stormont provides management and strategic services to Clearford Industries Inc.
The Conditional Offer to Purchase is subject to completion of due diligence by Clearford on the facilities, operations and corporate structure of Brooklin and to completion by Clearford of financing of the purchase price and additional capital for expansion. Financing will be by way of convertible debentures expected to total $25 million, convertible into Clearford common shares at a price of $0.80 cents per share. Lead investors have been identified for the debentures.
Lytton Financial Inc. has been retained as Clearford's exclusive financial advisor with respect to this acquisition and the associated financing.
Closing of the transaction will be subject to satisfaction of the Clearford conditions, approval by a majority of Clearford shareholders and the by the TSX-Venture exchange. Subsequent to closing the transaction Clearford intends to seek listing of its shares on the TSX.
About Clearford
Clearford Industries designs and implements waste water management systems utilizing the SBS(TM) patented solid and liquid waste collection systems. For many communities the system can provide community sewer and water systems with superior performance at costs which are significantly lower than the cost of traditional methods. Clearford's systems have been in operation in Ontario communities since 1989 are approved by the Ontario Ministry of the Environment and meet the Ten-State Standard in the United States.
About ROI Fund
ROI Fund is a labour sponsored investment fund (LSIF) with approximately $65 million in assets. The Fund was formed in December 2002, and is a leader in its class in both investment performance and asset raising. The Fund invests in mature stable businesses using debt to provide greater investment stability. The Fund has invested in over 10 Ontario based companies and true to LSIF mandate, has provided needed capital to Ontario businesses for job creation and growth.
For further information: Clearford Industries Inc., Mr. Bruce Linton, CEO & President, (613) 831-9906, www.iwssi.com; ROI Fund Inc., Mr. John Sterling, CEO, (416) 361-6162, http://www.roifund.com
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